Could the minister make it clear to us whether the truth is what
he said on November 17, what he is saying today or what he will
say next week? When will we know what he is saying, if he even
knows himself?
Is the minister resorting to the ploy used by the government
whenever it has some nasty trick in mind, that is to announce
something unacceptable once the session has ended, to avoid
being questioned about it?
Our position has not changed. We had a proposed rate scale from
an industry committee. We are now looking at a counterproposal
made two weeks ago. We are reviewing it and, as soon as a
decision is made, we will announce that decision.
What are we supposed to do? Ignore the industry and the
politicians representing the region affected? No. Upon receiving
a counterproposal, we looked at it. As soon as our review is
completed, we will announce the government's decision.
Which minister speaks for the government, the heritage minister
who espouses cultural protection or the trade minister who
advocates more concessions to appease American interests?
Now the trade minister wants to negotiate the magazines bill
directly with the Americans. So much for Canadian sovereignty.
No wonder Canadians have been participating in large numbers in
the citizens inquiry into the MAI. No wonder Canadians do not
trust the government to protect Canadian culture.
Will the government assure Canadians of real cultural protection
and not another cave-in to American interests?
If the leader had actually read the article she would have found
that I support the possibility of constructive amendments, as
does the minister of heritage, as long as they do not change the
bill. I said in the article that the American ambassador has to
recognize that we fully complied with the WTO decision. He has
to recognize that it is our sovereign right to promote and
protect our culture.
The minister of agriculture still does not have in principle an
agreement from his cabinet colleagues. When will the Government
of Canada find the political will to support our agriculture
industry before it is too late?
Maybe the hon. member was talking to farmers, but I can tell him
I have been talking to a lot more than farmers, the farm leaders,
and my provincial colleagues and I will continue to do so. I
will work with them to put in place an effective assistance.
I ask the minister of agriculture, why does the government
always wait too long and do too little when there is a problem
now in the agricultural industry?
Who let the heritage minister loose and how is this going to
help Canadian farmers?
When will the Prime Minister rein in the heritage minister and
her cultural cops and look after the interests of our farmers?
Should that not be our top priority?
The Reform Party is undermining what Canada stands for by those
kinds of silly questions.
Can the minister tell us whether this ferry will be exempt from
ice breaking fees and treated the same as the Quebec City-Lévis
ferry, given its very numerous daily crossings and the fact that
it is the only road link across the Saguenay in my riding?
Under the present proposal, ferries run by the province and not
covered by the terms of union, depending on the body of water in
question, will have to pay, such as the Marine Atlantic ferries
running between North Sydney and Port-aux-Basques.
The industry itself has not suggested a moratorium. Instead, it
has come up with a proposal to pay part of the coast guard
service provided to the commercial sector. That is the
counter-proposal we are now examining.
My question is for the Prime Minister. Which member of the
family does the Prime Minister support? The trade minister or
the heritage minister?
How can we expect the Americans to call off a trade war against
Canadian farmers when the heritage minister is annoying the
Americans on the split-run bill?
I really want to ask the hon. member why the Reform Party is
acting like such a bunch of wimps when it comes to protecting the
interests of Canada, whether it is culture or agriculture.
My question is for the Minister of Fisheries. By having the St.
Lawrence port users pay 80% of commercial ice breaking costs,
while they generate only 33% of them, is the Minister of
Fisheries not creating a considerable disadvantage which is
likely to compromise their competitive edge and consequently the
very survival of some of the St. Lawrence ports?
The committee submitted a counterproposal indicating that the
industry is willing to pay half the costs. Industry
representatives have never refused to pay part of the costs
associated with the operation of icebreakers on the St. Lawrence
River.
Do not forget, however, that this fee schedule has not been
reviewed for three years. There have been proposals and
counterproposals. That is common knowledge, and the industry
itself has never indicated that it wanted a moratorium. It knew
it was necessary to pay at least part of the government's
ice breaking costs.
Why is the justice department telling the police how to
interpret the Criminal Code?
In fact, right now law enforcement agencies and crown
prosecutors have discretion in terms of how they go about
enforcing sections of the Criminal Code. The police may choose,
especially in relation to minor offences, to formally caution or
warn as opposed to lay formal charges. There is nothing new
about that.
The justice department is breaking the Criminal Code by
counselling the police to not fully comply with the law passed by
this parliament which includes all of the Criminal Code. Yet
that is what the justice minister's official did.
Why is the justice department telling the police how to enforce
the Criminal Code?
As I have already pointed out, discretion lies with the police,
with crown prosecutors. They may choose to lay a formal charge.
They may choose to caution or to warn in certain circumstances.
I find it passing strange that the hon. member and his party who
are so opposed to gun control in this country would now argue for
strict enforcement of those very provisions they are opposed to.
However, the
office of the Minister of Canadian Heritage reported that the
government would not be watering down Bill C-55.
What lobby is the Minister for International Trade caving in to
to be in such contradiction with his own government?
Stats Canada last week released a report on employment in Canada
from 1989 to 1997. We all know that unemployment still needs to
be lowered. What is the minister doing to help Canadians find
good jobs?
This government has a number of programs to help create jobs.
Even our employment insurance system was redesigned to include
measures to help people get back to work. There are 245,000
Canadians who have gone back to work, thanks to the active
measures—
Since nearly 70% of British Columbians say they have not been
properly consulted and want a province-wide referendum on this
treaty, will the minister of Indian affairs accede to their
wishes and commit here and now to a province-wide referendum on
the Nisga'a treaty?
Negotiations have been going on for well over 20 years. I have
travelled to the hon. member's riding and talked to citizens in
that part of British Columbia. They feel they have been included.
My view is that they want the treaty completed.
The people of British Columbia say they have not been included
and over 70% say they want a say in a referendum on this
precedent setting deal.
Does the minister not agree that saddling British Columbians
with a treaty that does not enjoy broad public support is the
worst disservice she could possibly do for all British
Columbians, including the Nisga'a people?
As I have said time and again, this is an historic undertaking.
It has taken 20 years for us to come to this point.
This treaty will be debated fully in the House. I look forward
to hearing from the hon. member as he joins in that debate.
Now not only will Canada Post commission a restructuring of
stamp sales but it will also allow the big banks such as CIBC to
sell stamps.
Why is the government allowing Canada Post to force thousands of
small businesses into foreclosure, increase the already excessive
profits of the big banks and further disrupt postal service in
Canada?
We have the best postal operation in the world. We are working
with all the franchise operators to make sure they continue to
give the best service they can.
I am sure when the member learns all the details of the package
he will agree with me.
I would like to give the minister the opportunity to speak
directly to the people of those thousands of small businesses and
tell them he will tell Canada Post to put an end to this
devastating policy once and for all.
The member and others are predicting the end of the world. When
this package is fully implemented they will see that the
franchises will make more money.
Poverty is a daily problem in cities throughout the country as
new soup kitchens and shelters for the homeless spring up. This
is only the tip of the iceberg. Unfortunately, the federal
government has no program to provide financial assistance to
these organizations that help the most disadvantaged members of
society.
Will the President of Treasury Board promise to do everything
possible to create such a program, in order to help these
organizations that are dealing with the poverty of their fellow
citizens on a daily basis?
We have invested $1.7 billion in the national child benefit in
order to help families give their children the best possible
start in life.
We have implemented the Canadian opportunity strategy, as well
as the family income supplement, to help families in need.
Specific measures are required, as well as a major tax reform.
Would the minister not be interested in helping create a special
joint committee of the House of Commons and the Senate to
identify the real problems of poverty and their solutions?
Co-operation between the two levels of government is better than
it has been for years. The provincial ministers responsible for
social services and myself are co-operating very closely and
productively to combat poverty throughout the country.
We know environmental challenges require the commitment of all
Canadians in each community across the country. What is
Environment Canada doing to build partnerships with communities
and to increase the capacity and the impact of grassroots
environmental initiatives? How will these initiatives impact our
environment?
It is also the responsibility of every Canadian to take action
to protect the environment. Because of this I have initiated
millennium eco-communities whereby every member of parliament can
instigate within their constituencies the development of a core
group of citizens who will set goals and achieve results on clean
air, clean water, climate change and nature.
He has had a weekend to think about it. When will he stop
pardoning known sex offenders and allow Canadian parents to
protect their children?
Federal and provincial ministers met in Regina and came up with
a comprehensive report. This report is supported all across the
country. For example, recommendation No. 7 in the report
indicates that even if a sex offenders receives a pardon there is
a flag. When the police review the file they will know that
individual has committed a sex crime.
David Caplan, the president of Pratt & Whitney Canada, says that
the reduction in federal investments in research and development
is responsible for the 18% drop, over a three year period, of
the added value in Canada's aerospace industry.
When will the Minister of Industry have the courage to say
unequivocally that investments in Technology Partnerships Canada
must be increased by at least $100 million to maintain
productive employment in Quebec and in the Montreal region—
Transportation infrastructure is vital to economic development
on first nations. The Government of Manitoba has told the chief
of the Mosakahiken First Nation that road connections from Moose
Lake and Cormorant are a federal responsibility because 80% of
the population is first nation.
If this government is serious about promoting economic
development to end first nations destitution will it commit
necessary funds for road building in partnership with provincial
and first nations governments?
As a result of our work with “Gathering Strength” we have been
able to identify that there are increasing numbers of
partnerships not only with provinces but with third party
interests that will help us deal with the issue of economic
development. It is a challenge for all of us. If we marshall
all the resources, I am convinced we can support first nations as
they move toward self-sufficiency.
What steps is the minister putting in place to correct this
potential safety situation?
It is important to understand that this study was commissioned
by the Department of Transport, and is available under access to
information, because the department was concerned about the
implications for safety with respect to a lot of the changes
going on in the last few years.
As a result we put in place a program to reclassify people and
to recruit people for air inspection. ICAO has just completed a
study of our air inspection and preliminary reports say the
system is—
We are very concerned about allegations of an alliance between
the former FAR and Interahamwe, which are responsible for the
1994 genocide, and the Kabila government.
Canada hopes that all the parties to the conflict will continue
the talks and will immediately comply with a ceasefire.
The minister has known about this situation for months.
Independent reports say the industry is on the verge of a crisis.
What steps is the minister taking now—
The minister had the opportunity to review the letter dated
November 6 in which Spexel, a company based in Beauharnois,
demonstrated it was unfairly excluded from bidding on the
contract for the supply of security paper for Canadian
passports.
Will the minister now give Spexel the assurance it will be
allowed to submit a bid and will no longer be subjected to this
uncalled for exclusion from government contracting?
Lo and behold the name of his branch that is under so much fire
these days has disappeared. The health protection branch has
gone and is replaced with something called management of risk to
health. HPB is out; MRH is in.
Why has the government abandoned the whole notion of health
protection, adopted the language of multinational drug
corporations and shifted its focus to risk management?
There have been problems in the branch over the years. They go
back many years. We have come to grips with those, put forward
different models and different approaches for public comment.
Public meetings have been held across the country.
We are in the process of examining various ways in which the
health protection branch can more effectively discharge its
responsibilities to ensure the safety of the public.
Pursuant to the provisions of Standing Order 110(1), these are
deemed referred to the appropriate standing committees, a list
of which is attached.
He said: Mr. Speaker, today I introduce through this private
member's bill a deterrent to inmates escaping from prison, being
unlawfully at large or escaping from lawful custody. I am
determined to change the law so these individuals will serve
their time consecutively. In other words they would do
additional time to their current sentence for their actions.
My motivation for this move is the unprecedented number of
escapes from prison and those unlawfully at large, in particular
the UALs in my community. Somebody must put his foot down to
send a clear message to Corrections Service Canada and the law
courts that real deterrents are necessary to ensure public
safety.
We should be putting deterrents in place for prison escapes to
assist our police forces which deserve the maximum of amount of
support we can give them in the process of protecting the public.
If the Liberal government will not provide deterrents, I will and
we can be certain that the bill will be followed through to
successful conclusion.
I believe the House leadership of all parties has a copy of the
draft standing orders. Could the Chair deem them to have been
read? Then of course I would ask that the Chair seek unanimous
consent to adopt them without debate.
This means that hundreds have come in. The petitioners spell
out very clearly that they believe, as do the majority of
Canadians, and understand the concept of marriage as only a
voluntary union of a single male and a single female.
The Canadians who signed this petition note that there continue
to exist over 35,000 nuclear weapons on the earth. They note the
continuing existence of nuclear weapons poses a threat to the
survival of human civilization and the global environment. They
agree with the secretary general of the UN who said that the most
safe, sure and swift way to deal with the threat of nuclear arms
is to do away with them in every regard.
They call on parliament to support the immediate initiation and
conclusion by the year 2000 of an international convention that
would set out a binding timetable for the abolition of all
nuclear weapons.
The talks recently collapsed in Paris. Nevertheless the
petitioners call on the government not to seek another venue for
the MAI negotiations but rather to reject the current framework
of MAI negotiations and to seek an entirely different agreement
by which the world might achieve a rules based global trading
regime which protects workers, the environment and the ability of
governments to act in the public interest.
The first petition was organized by Christ Lutheran Church in
Kitchener, Ontario. The petitioners request that the Government
of Canada allow tuition fees to accredited, private elementary
and secondary institutions to be tax deductible in the same way
as is permitted for colleges, universities and trade schools.
The first is sponsored by Canadians for Animals Rights and the
Environment. They are petitioning the government to amend the
marine mammal regulation of the Fisheries Act so as to prohibit
the commercial slaughter of seals and discontinue its subsidies
of seal products and the Canadian Sealers Association.
The second petition was prepared by Canadians Against the
Commercial Seal Hunt. They request that the Government of Canada
enact legislation to stop the commercial seal hunt in Canada.
The petitioners would like to bring to the attention of the
House that human rights violations continue in many countries
around the world including countries such as Indonesia. They
also point out that Canada continues to be internationally
respected for its defence of international human rights.
The petitioners therefore call upon the government to continue
its efforts to speak out against countries that tolerate
violations of our human rights and to do whatever is possible to
bring to justice those responsible for such abuses.
The petitioners express concern and call upon the government to
take note of the possible negative impact of genetically altered
foods and note that the absence of proven deleterious
consequences on health and the environment must not be used to
justify the production of potentially calamitous and untested
substances.
They express concern about the government's actions with respect
to codex alimentarius and its failure to take a strong position
in this regard. They call upon the government to ban genetically
engineered foods and crops, the human genome diversity project
terminator gene, and the exploitation of the knowledge of
indigenous people for private profit.
One is on Bill C-255, an act to amend the marriages prohibited
degrees act and the Interpretation Act.
They call upon parliament to enact legislation which would
provide and strengthen protection to children from convicted
child sex offenders on which the member for
Pictou—Antigonish—Guysborough has a private member's bill.
As well, I received my two girls' report cards today and they
are fantastic.
The House resumed consideration of the motion that Bill C-40, an
act respecting extradition, to amend the Canada Evidence Act, the
Criminal Code, the Immigration Act and the Mutual Legal
Assistance in Criminal Matters Act and to amend and repeal other
acts in consequence, be read the third time and passed.
Under section 44(1) of the legislation the minister may
determine that a surrender order will be unjust or oppressive
because we in Canada do not have such lengthy sentencing
practices. This is a case from the United States. It does not
involve capital punishment, but it does involve the potential for
a minister to practise imposing political opinion on foreign
jurisdictions, and again this is wrong.
If we as a country have a disagreement with the methods of
punishment of other countries, then perhaps we should not enter
into agreements with them on the extradition process. We should
not agree to extradite and then dictate to them how we wish them
to punish their criminals. We certainly would not like to see
the shoe on the other foot. We would not like to see other
countries order us to punish our criminals in a certain manner
prior to their release on extradition back to Canada. In fact we
would probably not put up with it. We should not attempt to
impose those same restrictions on other countries.
I have a few more comments about the minister having the
executive power to refuse to make a surrender order. There has
been much talk about this legislation modernizing the extradition
process. There had been many complaints about our present system
being too slow and too complex.
Bill C-40 is intended to make the process more efficient and
effective. However, we still have the problem of the sections
under the reasons for refusal which start at page 17 of the bill,
the involvement of the minister to in effect veto the actions of
our courts.
We have already seen the present minister recognize her
inefficiency and ineffectiveness with our own section 690
Criminal Code applications. It sometimes takes years for her to
decide whether an injustice has occurred within our own judicial
process. She is looking for some way to offload her
responsibilities.
We have already seen how the minister can make an extradition
surrender order only to have that decision appealed to our
superior court. It will have taken years merely to ultimately
decide whether or not to return two alleged murderers to the
United States. Our bureaucratic system is doing little to bring
closure to the families of the victims of that crime. It is
doing very little to put that matter to rest within that
particular community.
The legislation leaves much to be desired. It leaves far too
much discretion or power with the minister. We have seen prime
examples of the minister being unable to properly deal with
decisions under our section 690 applications in our present
extradition process. The legislation will not change that
difficulty.
The government has made up its mind that it is better to appear
to do something rather than to actually do it right. As a member
of the official opposition all I can do is point out weaknesses
and hope that at some point the government will listen and start
to do what is right for Canadians rather than continue to act
solely for political reasons.
The House proceeded to the consideration of Bill C-41, an act to
amend the Royal Canadian Mint Act and the Currency Act, as
reported (with amendment) from the committee.
It was over 10 years ago that the legislation governing the mint
was amended to allow it to become a fully commercial crown
corporation. Bill C-41 is designed to improve the mint's
operations and to improve its potential in markets that have
changed considerably since 1987.
I do not intend to go into great detail about the content of the
bill. However, I would like to briefly reiterate to the House
the basic purpose of the bill which is threefold: to streamline
the approval process for issuing coins and coin designs; to
provide flexibility in the governance structure of the mint; and
to increase the powers of the mint within its existing
accountability structure which will allow it to achieve its
vision of global leadership in minting. The passage of this
legislation is crucial to the mint's future.
One thing that struck me during previous debate and subsequent
further examination at the committee stage is how intense the
competition is within the international coin market. This global
business, that accounts for 70% of the mint's revenue, also works
to reduce the overall cost to Canadians for the circulation of
their own coinage. Last year alone the mint produced one billion
coins for 16 different countries. By the end of this year that
total will rise to an amazing 2.5 billion coins.
We are, through the provisions of Bill C-41, proposing that the
mint be given the powers of a natural person to provide it with
sufficient flexibility to meet its long term strategic direction
and achieve its vision of global leadership in minting. The
powers of a natural person will allow the mint to support its
public policy role of producing domestic coinage and operating at
a profit.
The mint will continue to be able to exercise all of the same
specific powers that exist in current legislation while enabling
it to acquire more general powers in support of its mandate.
However, it is still subject to the existing accountability
framework found in the Financial Administrative Act. It would
still involve review by the Treasury Board and the approval of
the Minister of Finance and the governor in council. In addition,
the auditor general will continue to conduct an annual audit of
the Royal Canadian Mint as well as a special examination every
five years.
With the powers of a natural person, the mint will be more
proactive and able to react more quickly to new business
opportunities. These powers will provide the mint with the
flexibility to enter into alternate business structures, such as
alliances, partnerships, and subsidiaries. With these powers the
mint will be in a more advantageous position in relation to all
challengers within an extremely competitive international market.
The mint currently operates extremely well in a highly
competitive and rapidly changing environment. These new powers
will give the mint the increased flexibility it needs to be
market sensitive, seize new business opportunities and be a more
profitable enterprise for the benefit of all Canadian taxpayers.
Another key provision of the act is to increase the mint's
borrowing authority which will allow the mint to foresee
financial needs and the ability to respond quickly to any market
opportunity that is commercially attractive and advantageous.
This increase was seen by independent third party experts as
prudent and realistic in keeping with current market conditions
and practices.
The mint borrows for short and long term purposes. Long term
borrowing is required for investment in capital and technology.
Short term borrowing allows the mint to finance more competitive
bids and expand its markets. It is important to note that the
mint's borrowing limits will still be subject to approval by the
Minister of Finance and the governor in council.
These powers will put the mint on the same legislative footing
as other successful commercial crown corporations. Just as
important, it will place the mint on an equal footing with its
main competitors, other government mints, such as those of the
United Kingdom, Austria and Germany.
This legislation will therefore improve the mint's competitive
edge immeasurably and will ensure the Royal Canadian Mint
achieves its vision of global leadership in minting. However, as
stated previously throughout debate on this bill, the mint will
still be subject to the same rigorous accountability framework
that exists now.
Members will note that the bill has been amended at committee in
order to maintain the role of parliament regarding the addition
of new circulation coins and the deletion of existing circulation
coins.
Bill C-41 does allow the mint to make changes in the
characteristics of circulation coins by regulation rather than by
time-consuming debate in the House. This allows the government
to react quickly to changes in production costs and availability
of metals while ensuring there is full opportunity for
consultation and participation by Canadians at the occasion of
adding new coins or deleting old coins from circulation. In fact,
the amendment acts to improve the bill even more.
In closing, I would like to also note that Canadians should be
proud of the true success story of the Royal Canadian Mint. Our
mint is one of the finest in the world. Canadian coins are world
renowned for their high quality and beautiful artistry.
I would like to take this opportunity to pay tribute to the
mint. It is a truly world class competitor operating on solid
business principles in an increasingly competitive market. In
recognition of this, I would submit that passage of this bill
would be our way of providing the Royal Canadian Mint with the
best means of achieving its goals. Canadians should expect
nothing less.
As the hon. parliamentary secretary has indicated, it is a bill
to make some major changes in the mint. I find myself somewhat
less supportive of the bill than is the hon. parliamentary
secretary.
I would like to assure her, all members opposite, as well as the
chief administrator of the mint, the master of the mint, that I
in no way wish to cast any aspersions on how the mint is being
operated. The master of the mint is doing a very competent and
fine job. If I were wearing a hat I would take it off to her
because the work she is doing is excellent. She is a very good
manager. She is aggressive, alert and knows what to do. She is
capable and competent in the work she has been charged to do. She
has also been very successful in turning the mint around so that
today it is a profitable venture. I just wanted to recognize
that and support the work she is doing. I certainly agree with
the hon. parliamentary secretary that the mint is in good hands.
The matters I want to come to grips with have nothing to do with
the operation or focus of the mint as it presently exists. My
purpose this afternoon is to focus on those things that have to
do with government and public policy which are implicit in the
amendments proposed by the government. It is very important to
recognize exactly what it is that underlies the amendments that
are currently being proposed in Bill C-41.
I want to focus on the issues from three particular points of
view. First, I focus my analysis of the bill on the role of the
government in providing programs and services for the people;
second, the role of government to determine the conditions under
which the economy operations; third, the mechanism of crown
corporations and their place in light of the role of the
government and how it presents itself.
It is very critical and necessary for us to remember that the
mint is a crown corporation, as is the Business Development Bank,
as is Canada Post, as is Canada Mortgage and Housing Corporation
and a whole host of other crown corporations. The mint is in the
same kind of category.
The first perspective is the role of government in providing
services and programs for the people. First the caveat. Those
listening might say what in the world does that have to do with
Bill C-41. As I progress through my remarks it will become very
clear that not only do the principles apply but they should apply
not only in the case of the mint but to all other crown
corporations. We want to be sure we recognize that is issue. We
need to go one step further and assert that the principles
existing here should apply to not only crown corporations but to
the provision of government services and programs to meet the
needs of the people of Canada.
What is the role of government in terms of determining the
conditions under which the economy operates? The number one
principle I would like to annunciate clearly is that of freedom.
The Government of Canada needs to provide for the people of
Canada, and for businesses generally, freedom. What is the
freedom we want them to have? We want them to have the freedom
of expression, to express and to hold views that are consistent
with their particular sets of values and beliefs. We want them to
apply their talents, their abilities, their competence, their
innovations, all those kinds of things in a way that best suits
their needs and developments and in a way that they can reap the
most money and benefit from the application of those skills.
Mr. Speaker, you are one of those entrepreneurs. You know
exactly how this kind of thing works. You express yourself in a
most powerful way in your particular business, the one you are
involved in now, the businesses you have been involved in before
and the businesses you will be involved in the future. It is not
only yourself, Mr. Speaker. There are other people on both sides
of the House who also want the freedom to express their
creativity and the things they do in the best way possible to
garner a profit and at the same time provide a service and
fulfill a need in the public.
There is another kind of freedom we want. We want it in
business. We want it in the individual lives of people. That is
the freedom to believe what we want to believe.
This morning it was my privilege and honour to be at the Sri
Chinmoy peace celebration at the Chateau Laurier. Sri Chinmoy
has gone around the world in the interests of peace. We had
representatives from New Zealand, Zimbabwe, South Africa and many
nations of the world at the Chateau Laurier this morning. They
were there with one purpose in mind, to declare Canada and to
celebrate Canada as the first nation in North American to be a
Sri Chinmoy peace nation. It is wonderful to be a part of that.
I was there to witness this event. The idea that we can be free
to express whatever we believe in a positive way is necessary and
essential for us to do what is right.
We have talked a little about entrepreneurship and the ability
to apply one's capital in the way one wants not only for one's
own benefit but to build the economy and build the country.
There is more than that to this business, the matter of
ownership. There comes with ownership a certain pride. People
who own property somehow feel a little better toward maintaining
that property and keeping it looking good and things of that
sort.
The first principle the government needs to provide is the
concept of freedom. Next we need security and stability.
Members saw in question period questions raised about how people
sometimes find their personal security, their personal life being
attacked and their comfort being attacked.
We want protection and safety of person. We want to make sure
that is there and that it is maintained that way. We also want
security of property. So often we find that people want to
damage property.
We need to be sure that our society and our government provide
an environment so that the property we have maintained is safe,
so that we can go home and we do not have to worry that somebody
will damage our property while we are at home looking after our
children or doing some of the other things we like to do with our
loved ones, our children, play games and things of this sort. We
want our property looked after when we are away from home.
Here I think is the very fundamental issue where we come to this
business of ownership, expertise and enterprise. We need
conditions established by the government to create laws that
encourage entrepreneurship. To create a bunch of crown
corporations does not stimulate entrepreneurship. Our laws that
establish crown corporations do not encourage entrepreneurship. I
will get into this in detail when it comes to the mint.
We need to do that in a variety of areas. We need fair
competition. There are all kinds of indications today about
being sure it is fair, that there is not abuse of dominant
position.
In Canada we have the Competition Bureau and the director
currently involved with probably one of the most difficult
decisions he will have to make a recommendation about to the
government. That has to do with the merger of the big banks. We
want to make sure the laws the government creates are such that
competition is fair.
The hon. member opposite suggests the Competition Bureau has no
power, it cannot do anything. If that is the case, the
government has made another mistake, creating a Competition
Bureau which is apparently supposed to have some power. The hon.
member says it has no real power. Therefore the government
should then create a law that gives the Competition Bureau some
power. I suppose the hon. member will say do that then. That is
exactly what we are talking about here.
The third area we need to be sure about, in which the government
creates security, is the conditions under which we can conduct
our business, namely the availability of capital.
We have had all kinds of talk here within the last four or five
years about access to capital, particularly for small business.
If there is not availability of capital, it is very difficult if
not impossible to do business, to get involved in a business, to
develop a business, to grow a business. The availability of
capital is the next issue the government needs to make sure is
there.
There needs to be as well a provision for fair and just labour
laws that work. The operative word here is work, labour laws
that work, that do not create strikes, that create an environment
in which both labour and management can work together, where the
organization can achieve its goals and where labour and
management can work together as a team to get this to work. We
need good, solid, fair and just labour laws to make that happen.
We need more than that. We need reasonable government
regulations as well, not regulations that become overburdening so
that businesses spend more time figuring out how to fill in all
the forms than doing business.
There has to be confidentiality and protection of intellectual
property. In this new age of knowledge based industry that is
particularly significant. Individuals need their intellectual
property protected.
We need to deal with the protection of privacy. The privacy of
persons, business and government needs to be protected. I am sure
members are aware of what happened in July. A company that was
to shred documents did not shred them but instead sold them at a
profit. There were some very serious documents and some very
significant breaches of privacy and violations of privacy
provisions in that operation that did not meet the objective for
which it was set up to work. Our laws are there but there was a
failure somewhere with someone not doing what was necessary to
monitor and ensure the laws were observed. Not only good laws
and good regulations but the enforcement of those laws has to
take place.
Jobs need to be available. In order to provide jobs we know now
from a variety of cases that the first issue here has to do with
reduced taxes. We have the Canadian Federation of Independent
Business, large businesses and we have had individuals who create
jobs say the number one stimulus for creating jobs is lower
taxes. If we increase taxes, we reduce jobs. There is
substantial evidence that is the case.
The Canadian taxation structure has been rising. The taxes we
pay have been rising. There is excise taxes, GST, provincial
taxes, income taxes, property taxes and on and on it goes.
There is another issue. People will say we need good safety
nets. The best possible safety net is to have good, well paying
jobs for people. That is the safety net that really works. With
whatever safety nets we have for those people who are unfortunate
enough to need them we have to make sure the benefits of the
safety nets are not greater than the benefits that come from
profitable employment.
If people are gainfully employed and make less on their gainful
employment than they would from the benefits of a social program,
that is a disincentive to seek gainful employment.
I believe the government is responsible to make sure the
conditions within which businesses operate are supportive of
entrepreneurship for gainful employment, creating jobs and things
of this sort.
We need to move on to what I consider the shallowness of
government thinking in the preparation and presentation of this
bill. We heard the hon. parliamentary secretary say the mint was
incorporated about 10 years ago. In the last 10 years there has
been no review of the legislation, so we had better look at it.
That has to be one of the most profound reasons for doing
anything that I have ever heard.
We have legislation. It is working. The hon. parliamentary
secretary recognized the master of the mint is doing a very fine
job and I agree the job is well done. The mint is doing its
work. It is making money. We have to review to make sure we
know what it operates under. It is operating well. That is the
reason, though, for presenting this legislation. We have not done
it for 10 years so we had better do something.
We need to increase the borrowing power of the mint. It
currently has the right to borrow up to $50 million. The
legislation proposes that be increased to $75 million. Why? To
take advantage of any possible business opportunities that might
come about.
I was absolutely flabbergasted in committee when I watched
members opposite listen to the argument that was presented.
Guess what it was? The presentation indicated that during the
last 10 year period an opportunity came along for the Canadian
mint to buy a mint in another country. But it could not buy the
mint in the other country because it would have had to borrow
more than $50 million.
At no point was there any question about whether the Canadian
mint was in the business of acquiring mints in other countries.
That might be a useful discussion.
Why does the Canadian mint need to buy a mint in another
country? That fundamental question was not addressed.
Let me look at another aspect of the analysis. This has to do
with the number of directors on the board. The proposed bill
suggests that the number of directors on the board be flexible,
ranging from 9 to 11. The current legislation provides for 11
directors. Why the change to 9 to 11? It is to create some
flexibility and to save costs.
If the real reason is to save costs, then I think we should fix
it at 9. Why go to 11? If it is good sometimes to have 9 and
sometimes to have 11, why would we not go with 9, especially if
the reason is to save money?
What I am trying to point out, not only to the hon. member but
to members opposite, is that is not in-depth thinking. This is
superficial, manipulative, opportunistic thinking which allows
individuals to take advantage of a particular opportunity to suit
their advantage and to suit what they want to do. It is not in
the interests of the Canadian public. That is the point I am
trying to make. That is why it is worthwhile debating this
particular point, mundane or otherwise.
I now want to move to the fourth area which has to do with the
role of crown corporations generally. This is probably one of
the most significant issues for us to come to grips with which
has not been dealt with in the House for quite some time.
I would encourage the parliamentary secretary to read this
document. This document concerns the crown's financial
institutions. It was published by the Senate Standing Committee
on Banking, Trade and Commerce.
That particular committee did some very in-depth thinking about
corporate structures and crown corporations in particular. The
report addresses the need for cost effective ways of delivering
business oriented government programs to the public. To achieve
these ends government must ensure that policy goals are clear,
that the mandates of the agencies and employees to deliver its
programs are clear, that they do not waste public resources
through needless duplication of efforts within government and
that the government and the private sector act in a complementary
fashion whenever possible, with government doing what it does
best while encouraging the private sector to do what it does
best. Those are four fundamental principles that we need to
observe.
It is significant that the committee came to an overall
conclusion after it heard from all the witnesses and reviewed all
the studies. It concluded that there is an important role for
the federal government to play when the private sector fails to
meet the needs of worthy business ventures. In other words,
government must respond when gaps exist in the system. To this
end the government needs to employ a number of strategies to fill
these gaps. However, when these strategies lead to unnecessary
overlap and duplication among different government agencies or to
competition with the private sector the resulting inefficiency
hurts everyone.
That is a pretty powerful statement and it fits right into the
debate we are having this afternoon on Bill C-41.
During the last five or six years the government has been
telling crown corporations that they must become self-reliant. In
this case self-reliance does not mean they would manage their
affairs efficiently. It goes well beyond that. It says not only
must they be efficient, not only must they achieve the golden
purposes of the organizations for which they were set up, they
must also make a profit so they can return a dividend to the
shareholder, which is the government.
This is abundantly clear upon reading the purpose and function
of Canada Post, the Canada Mortgage and Housing Corporation, the
Canadian mint and the Business Development Bank of Canada, to
mention only four. It is abundantly clear that one of the
motivating factors is that to be self-reliant means to make a
profit.
A crown corporation is a very unique creation. It is neither
government, nor is it private. It is sort of a hybrid between
those two. We need to look at some of the confusion that has
resulted because of this situation. The crown corporations have
confused their roles, goals, philosophy, management style and
focus. Let us look at each of these in a little detail.
Concerning the roles and goals of crown corporations, they must
ask themselves the following questions. Are we customer or
client oriented, or are we politically oriented? Where is our
primary focus: on the client or customer, or on our political
master? What is our goal? This is the second area about which
they are confused. Is our goal to fill a gap that is not being
provided by the private sector, or is it to advance our profit
prospects and compete directly with the private sector by
expanding into businesses that are more lucrative? I have
examples of each.
Concerning the philosophy of crown corporations, they must ask
whether they believe they should serve the public, their
customers and clients, to the best of their ability, or whether
they should primarily look after the political interests of their
shareholder, the government.
Concerning management style, they must ask whether their style
is to be that of a consistent, compassionate team player in which
employee and employer share in the pursuit of mutually beneficial
corporate goals, or whether they are to be the strong arm of the
government and say “This way or no way and, come hell or high
water, like it or not, you are either going to do it my way or
you are not going to do it at all”.
This was particularly evident in the most recent action by
Canada Post to its postal franchisees. It started on April 1 by
telling them this is what they were going to get. They did not
like it. They found it to be troublesome. Canada Post delayed
it until October 1. It said that it would hold a lot of
consultation. It could not meet that goal, so it said that it
would wait until December 1, which is tomorrow.
We still do not know what it is going to do. It went through
the various consultations. I have talked to franchisees from
across the country, from one end to the other, and every one of
them said this was a one-way consultation: “This is the
program. This is how you have to present it. This is how it is
going to affect you”, with no particular change, unless there is
a change happening today which we will hear about tomorrow.
That is not exactly in the interests of itself.
The point we need to recognize is that there are some questions
above those about goals, philosophy, focus and management style.
There are other questions which need to be addressed.
Does the crown corporation complement or does it compete with
the private sector?
Particularly significant in light of this question is the recent
broadening of the scope of crown corporations to make them
self-reliant. The only way to do that has been for crown
corporations to go after profitable businesses in the private
sector.
Let me give one good example, the Business Development Bank of
Canada. It recently published an ad in the Globe and Mail
which presents to the people of Canada a guaranteed GIC backed by
securities on the Japanese stock market. The bank says that if
the GIC is kept to maturity, seven years, the purchaser's capital
will be guaranteed. Regardless of what happens to the market,
there is a guarantee that the capital will be returned. In the
meantime, the interest paid on the GIC will be directly related
to the performance of the Japanese stock market.
What has the Business Development Bank of Canada got to do with
this kind of thing? It is not a deposit taking institution. It
was created to help small business people and, in particular, to
develop the knowledge based sector.
Looking at the record of what the Business Development Bank has
done in terms of supplying capital to small business and
comparing that to what the chartered banks have done, we discover
that in proportion to the amount of money it is lending out the
Business Development Bank falls short. The chartered banks are
actually doing a better job than the Business Development Bank.
It is a crown corporation. What is it doing? It is not meeting
the objective for which it was originally set up. It is doing
something else. It is getting into an area that is currently
being served by other organizations in the private sector.
We need to ask a second question. Does the crown corporation
move away from the high risk or low profit areas and enter into
more profitable areas? I can talk about a couple of issues.
I want to refer particularly to the credit unions and the Farm
Credit Corporation. When the credit unions appeared before the
committee they said “Because the Farm Credit Corporation is
under so much pressure to meet its own bottom line as an
institution, it is going after that kind of business in the very
markets in which we have always been doing that. That is a real
difficulty for us. It is not that we will not sit down and work
with them on this. However it is one thing to talk about
partnering and another thing to get down to the nitty-gritty of
what partnering means and what role each partner is to play”.
The credit unions, private organizations, are in direct
competition with the Farm Credit Corporation, a crown
corporation. They are essentially doing the same thing. FCC is
now moving into an area that is not as risky and is not doing
what it was originally set up to do.
There are all kinds of examples like that. We obviously do not
have the time to get into that at this point. We need to
carefully think through what the role of crown corporations
really is.
I want to focus particularly on the final part of this paper.
Two persons provided expert advice and this is to the credit of
the parliamentary secretary.
Professor Trebilcock of the University of Toronto told the
committee which deals directly with the question before us:
Then he went one step further. He said:
Those are key questions from a key scholar in this particular
area.
Then comes a practical application from Peter Kemball of Acorn
Partners who said: “It is a very basic, philosophical problem,
if you will, grounded in economics, and I just happen to have
concluded, having watched things over the years, that while there
are some very good things that have happened as a result of these
organizations”—crown corporations—“those things could come
about in other ways”.
He went on to say: “In fact, that is what the hon. Minister of
Finance was saying in relation to a different environment. We do
not need the public sector to make those things happen in a
general policy sense. In the specific sense, yes, it is quite
true that a particular deal may not have come together in the
absence of such an organization. However, by and large, it is a
policy failure. We do not have our overall rules right. That is
why we now have these organizations”.
The committee recommended that certain public policies such as
some aspects of the tax system, public programs such as the Small
Business Loans Act and public institutions such as crown
financial institutions be reviewed with an eye to changes which
could be made to encourage the development of new initiatives in
capital markets.
In conclusion, the important thing here is to recognize that the
mint is a crown corporation and that there has not been an
in-depth analysis of the need to change the act. There has not
been a demonstrated need to increase the $50 million to $75
million in borrowing power. Why? Because at the moment it only
has a $14 million loan outstanding, $9 million of which is long
term and $5 million of which is short term borrowing.
Sure, it has an opening to borrow to quite a degree and it does
need to borrow from time to time to meet its cashflow
requirements. I agree with that and support it. However, that
does not mean it can now borrow $25 million more, except for one
thing, the mint is now moving directly into competition with
institutions, organizations, private sector businesses like
Westaim. Because of that, it has added an addition to the mint
in Winnipeg at a cost of $30 million. Lo and behold, if we take
the $14 million it has now and add the other $30 million to it,
we are up to the ceiling. Now it needs $25 million more for
cashflow.
I can understand that but this means that the mint has left its
primary focus, that of minting coins, and gone into the
manufacture and plating of coins which cuts directly into the
business of a private enterprise in Fort Saskatchewan.
Constituents object to that.
We expand the power. We have not even talked about how the
mint's power has been expanded. By allowing it to have the
powers of a natural person it is able to form subsidiaries and
buy other businesses. It can do virtually anything it wants.
That is fundamentally in error and not consistent with the
purpose and role of a crown corporation which is to fill a gap
that the private sector is not filling and to serve needs that
are not being served in other ways.
That is why I am objecting. It has nothing to do with the
administration of the mint or its functioning today.
Before I do, however, I would like to remind my fellow residents
of Chambly to vote today, because for them and for all
Quebeckers, today is a very important day. According to the
polls, the people of Quebec are anxious to get out and vote,
they want to participate in this democratic act.
Bill C-41, which we are discussing today, responds to certain
imperatives with which we agree. For example, the Royal
Canadian Mint, or “the Mint” as it is called in the bill, is
setting itself up as a business. According to its president,
Mrs. Lépine, the Mint has an excellent world reputation and
mints coinage not just for the Canadian government but also for
other countries, on contract.
Examples were given of several countries that lacked the
technical facilities and support to issue their own currency
They contract this out to the Government of Canada, or in other
words the Royal Canadian Mint, which prints their bank notes and
mints their coinage.
As the Parliamentary Secretary to the Minister of Public Works
has already said, Canada can be justifiably proud of the coins
it produces, which are incidentally among the finest in the
world. I took the same tours as the parliamentary secretary,
and we could see that we had reason to be proud of our royal
mint when outside Canada.
The increase in borrowing power from $50 million to $75 million,
which upset the former speaker, I consider necessary.
It is necessary because Canada, which produces coins under
contract for foreign countries, must be competitive. Ms. Lépine
told us in committee that a firm that strikes coins, in England
I think, was recently up for sale. The Royal Canadian Mint was
not able to bid on it and acquire it, because it lacked not only
the legal capability but also the financial means to do so.
While the first condition was not present, the second could have
been arranged, in other words, with the capital necessary,
acquiring this firm would apparently have been a very good deal.
The Germans, our competitors in this sort of business, bought
the firm in question and they will likely benefit and profit
amply from doing so.
There are reasons for supporting Bill C-41. Unfortunately,
however, when we begin considering it, it is often the things
not in it that are the problem. It is often what this bill does
not include or change that causes a problem.
Section 3.1(2) in the Royal Canadian Mint Act gives the mint the
power to redeem shares it issued a number of years previously,
that is 4,000 shares at $10,000 each, in favour of a single
shareholder, the Government of Canada, providing $40 million in
capital stock. Bill C-41 makes no mention of this.
Section 3.2 of the current legislation, which is not amended by
Bill C-41, provides:
The price to be paid for each share redeemed by the Mint
pursuant to subsection (1) is the issue price of the share.
Therefore, in 1969, when the 4,000 shares were issued at $10,000
each, the price was frozen at that level. That is
understandable, as Ms. Lépine, the President of the Royal
Canadian Mint, told us. The government was the only
shareholder, and all the members of the board were government
representatives. So there was little or no chance that the
value of the shares would change. If it did, the government
would benefit one way or another.
Under Bill C-41, the Royal Canadian Mint receives corporate
status and the power to buy back its own shares.
1615
My friend, the member for Hochelaga—Maisonneuve, has been taking
law courses in his spare time this fall. He already has a
university degree and is qualified, but he wanted to brush up
and upgrade his skills. I am sure his brilliant academic
performance will make it possible for him to graduate magna cum
laude. For his benefit, as a friend, and that of the members
opposite, particularly the member for Winnipeg, who is absorbed
in his reading right now, I would like to say that, in corporate
law, purchase and redemption are two completely different
things.
Redemption takes place without the holder's consent.
This means that the Royal Canadian Mint could come to the
minister and say “We have accumulated a surplus and decided to
use it to redeem some of our shares. Here is $40 million in
exchange for the 4,000 shares issued at $10,000 each in 1969”.
This is called redemption. The shareholder, that is the
government or the minister in this instance, does not have to
agree.
This is how purchase differs from redemption. In one case, there
is an agreement. We are talking about a transaction by mutual
agreement. Agreement or consensus is what makes the difference
between purchase and redemption.
Section 3.2, which is not amended by Bill C-41, provides that
shares be redeemed at their issue price. At the same time the
legislation gives the Royal Canadian Mint what it has long been
asking for: the powers, privileges and legal capacity of a
natural person, including the power to acquire interests in one
or more corporations anywhere in Canada or abroad.
If the Royal Canadian Mint makes good investments and
acquisitions, its shares will increase in value. In 1969, it
issued 4,000 shares at $10,000 each. If it acquires companies,
distributors, gold refiners or other interests in the industry,
these shares will increase in value. I notice that the hon.
member across the way, my friend who represents the riding where
the military base of Petawawa is located, whose name escapes me,
is nodding in approval.
He knows I am right in making that statement, and I thank him
for that.
The danger is that, some day, the royal mint may decide to
privatize its operations. For two, three, four, five or ten
years, the Royal Canadian Mint could make acquisitions, mergers
and transactions to make sure its shares are worth good money.
We may not always have ministers as honest as the ones we now
have, including the current Minister of Public Works who manages
all that and who is responsible for everything. Canadians could
get taken by being told “We bought back our shares at $10,000
per share, even though their actual value is higher, and we sold
them back for $10,000 each. We did not incur any loss”. However,
there might have been a gain.
This is the type of operation we have to anticipate when we
discuss a measure as important as Bill C-41.
Members must not say that this sort of things cannot happen. I
have with me the report released by the auditor general in
October 1997. Chapter 20 of that document dealt specifically
with the privatization of Canada Communication Group, or the
government printing bureau, as it used to be called.
1620
In his findings, the auditor general is far from praising the
current government and the Minister of Public Works of the time,
not the current minister. A transaction was probably presented
to cabinet as a good operation, as a positive measure that would
eventually be successful.
Some figures were submitted but, unfortunately, they were not
absolutely up to date.
According to the auditor general, the projections were for a
three-year period but were not particularly useful because the
printing bureau, that is Canada Communication Group, had
invested in new technologies and, after allowance for
depreciation over the first three years, anticipated benefits
suffered. According to the auditor general, if a five-year
period had been used, the figures would have been very
different.
The presses were sold and the eventual buyer was given a
five-year option to purchase all government contracts under
$100,000. Say, for instance, that the auditor general's report
has to be printed. This would cost under $100,000 so the
Saint-Joseph group, which bought the presses, is called, and it
does it without a call for tenders for $100,000. Right now, 95%
of printing contracts awarded by the Government of Canada are
for less than $100,000.
So the Saint-Joseph group, which acquired the Canada
Communication Group, enjoys an advantage that not all its
competitors have.
I share the concern of the Reform Party member over this kind of
attitude. The Auditor General of Canada also castigates the
people who decided to sell the Canada Communication Group.
Between the tendering of submissions in November 1995 and the
actual sale in March 1996, the bidder comes out $454,000 ahead.
Were all the other bidders aware of this? It seems not.
The highest bidder saw his price drop by $454,000.
If we do the same calculations, looking at these things, we
notice that there is also a small error of $150,000, for a total
of $604,000. That is over the half-million dollars that favours
the Saint-Joseph group. The auditor general goes on for pages in
his report criticizing this transaction. He does not condemn it,
because it is the first major privatization this government
undertook. But we can see that he is in the process of spilling
the beans about a number of privatizations.
What concerns me at the moment is the day the mint is
privatized, because we know that, when a business is in
difficulty, it becomes a public business. When it turns a
profit, the government sells it to its friends.
The public at large absorbs the deficit, and the benefits are
shared by a gang of friends, who, oddly enough, are rarely
members of the opposition. They are more often friends of those
on the right side.
1625
This sort of criticism has to stop. Provisions must be
established to prevent this sort of criticism from recurring, to
move this sort of thing far from the minds of politicians and
legislators.
This is why I say that, had the government truly acted in good
faith, it should have amended subsection 3.2(2) in Bill C-41
making the stock redemption price the fair market value of
stocks at the time of redemption.
If the price fluctuates, if it goes up as we hope, the
government will benefit.
If it goes down, as the government is already the sole
shareholder, it will make up the difference.
Although there is no talk right now of privatizing the Royal
Canadian Mint, it is not unthinkable that such a proposal might
be made in the not-so-distant future. If privatization is what
Canadians and their government want, it should be carried out
with the greatest possible appearance of transparency. We are
moving away from that.
It would be even more difficult because the bill allows the
Royal Canadian Mint to buy companies, goods, buildings, all
sorts of things, but does not give the Auditor General of Canada
the authority to audit companies owned by the Royal Canadian
Mint.
There is another weak point that has not been raised yet. One
day, I began to wonder about this. There was a post office in
my riding that unfortunately was located in the middle of a
shopping centre parking lot. The shopping centre owners had had
their eye on the post office for ages. “If ever that comes up
for sale,” they said, “we would certainly like to hear about it.
We would be interested in buying it”. I do not know who started
the rumour, but that same morning I received two calls at my
office, from the two owners of the shopping mall, who told me
that they heard the post office might be up for sale. I was
surprised, because I had not heard the rumour myself.
I phoned Canada Post and was told that it was indeed a rumour
whose origin was unknown. I was also told that, should Canada
Post decide to hand over the post office, presumably to a
charity, even parliamentarians and the government would not have
a say in it.
The only time the government has a say is when Canada Post
submits its annual financial statement and tells the government
“We generated x million dollars in profits for you, or we are
asking for x million dollars because we incurred a deficit”.
This is the only time the government can get involved and show
its authority or lack thereof.
The government has no say in the day to day management of the
corporation, or in the control of its assets and liabilities.
This is increasingly the case with crown corporations and this
is what we must control. Such a situation should not even exist.
Unfortunately, because of some principle, the government comes
up with bills like this one. We know we are in a minority and we
have no illusions, but, according to the principles of sound
management, we should have a say.
I see my friend, the hon. member for Charlevoix. He is a
prosperous man who manages his business successfully. He is
definitely not the type to keep his figures at the bottom of a
drawer; he will always be accountable to his wife, to his
children and to himself.
1630
A good manager must first and foremost be accountable to himself
and then release the information to Canadians, particularly when
that manager is a government that claims to be responsible.
The fact that we cannot buy back shares at their fair market
value and the fact that the Auditor General of Canada does not
have the authority to audit the subsidiaries of those companies
owned by the Royal Canadian Mint were major concerns for us.
I am less worried about competition.
My friend from the Reform Party referred to a company in western
Canada—he gave the name but I have forgotten it—which has the
expertise and the technical facilities to make coins. Yet, the
mint competes with this company, which pays taxes to Ottawa. So
this company's taxes are being used to support its competition
and force it out of the market.
If this is true, I agree with the hon. member that there is
something abnormal about this. I have heard people from the
mint describe this particular company as “overworked and not
able to keep up with demand. Recently, we had a requisition for
10-cent coins that we had to contract outside the country because
the company referred to by the hon. member could not provide us
with the coins when we needed them”.
The Royal Canadian Mint ought not to be competing with private
business, but our companies need to be competitive. If dimes
are needed for December 1, or loonies for January 1, there is no
use having them for March 1. Deadlines must be met. As
everyone knows, where money is concerned, deadlines are very
important. Just think of the old saying: time is money.
I would like to say a few words about the crown corporations,
which are not answerable to Parliament, the auditor general, or
indeed anyone, except for having to produce an annual report.
Some of them are even entitled not to have the auditor general
look at their figures, their statistics and their accounting
ledgers.
Let us discuss the Canada Mortgage and Housing Corporation. It
was created under the National Housing Act right after the last
war. The economy was growing and would give rise to the
families of the baby boomers. Our parents moved from rural
Canada or Quebec to the cities to help rebuild the economy.
They wanted to be part of a booming economy. They headed to
cities like Montreal and Quebec City.
So the National Housing Act was created to help these people,
who otherwise would not have met the banks' or mortgage lenders'
criteria. For example, in order to acquire property or a house,
they had to come up with 25% of the total price in cash as a
downpayment. At that time, people did not have that kind of
money.
So, the National Housing Act created the Canada Mortgage and
Housing Corporation, which could authorize and guarantee loans
with a much smaller downpayment. At the time it was 10% of the
total value of the property, and it was recently brought down to
5%.
1635
If we ask for money, for a loan from a company and it cannot
afford the 25% downpayment, we are told “Your loan is going to
be approved and guaranteed by the Canada Mortgage and Housing
Corporation. If you do not pay, that is not a problem, we will
get our money back from the CMHC. We will take your house away
and give it to the CMHC and we will get all our money back. The
CMHC will deal with your house”.
This is not free. The Canada Mortgage and Housing Corporation
charges $235 to look at the file.
A few weeks ago, the CMHC decided, because of the competition
and since this is a time when there are no house buyers, to
reduce its fee for a while and to bring it from $235 down to
$185, which is a $50 reduction.
People are being told “We are charging you $235 to assess your
situation, to appraise the house you want to buy, and then we
will let you know if we are going to lend you money”. But there
are other costs involved. There is a scale of fees. There is a
fee of 1% if you borrow less than $50,000; 1.5% if you borrow
between $50,000 and $100,000; and 2% if you borrow between
$100,000 and $150,000. That fee can reach 3.5%. The borrower,
that is the buyer of the house, not a rich person to begin with
since he does not have the required 25% for his mortgage equity,
really gets dinged when he gets a loan.
For example, if the CMHC lends him $100,000, he is told “We will
lend you $103,000, but we will withhold $3,000 on that amount to
pay for your mortgage insurance”. We are now finding out, and
this happens more and more frequently to the point where it is
almost an established rule, that the Canada Mortgage Housing
Corporation does not appraise the property for which it
guarantees the loans. The CMHC will often loan $100,000 for a
house and then discover, when it takes it back, that it is worth
$45,000. This is true and it is a common occurrence.
The CMHC says “It is not a big deal. We charged $2,000, $2,500
or $2,800 to the borrower. With all these accumulated amounts,
it is not a problem if we lose money, because we collected
enough to pay the mortgagee and absorb a loss of $50,000,
$60,000 or, in some cases, $70,000”. So, we are talking about
30%, 40% or 50%.
I think that this shows poor management on the part of the
Canada Mortgage and Housing Corporation. When a person backs
something, he should know what exactly it is he is backing and
what it will cost if things go wrong. But no. The Canada
Mortgage and Housing Corporation has more money than it knows
what to do with. It takes the attitude that, if the borrower
does not have the money, someone else will.
But if the Canada Mortgage and Housing Corporation were doing
its job, if it were assessing all buildings, or 50% of
buildings, and not just the 5% it is assessing right now in
Quebec, perhaps, instead of charging borrowers between 2% and
3.5%, it would reduce this to 0.5% or a maximum of 1%. The
Canada Mortgage and Housing Corporation would truly play the
role it was originally intended to play.
But, instead, it still comes under the authority of the Minister
of Public Works. A lax approach is taken, not to mention that
people who feel that the Canada Mortgage and Housing Corporation
is looking out for them and assume that it is in the
government's interest to protect them are often misled. People
say “I offer $100,000 for a property. If I am being had and it
is not really worth that amount, the Canada Mortgage and Housing
Corporation will let me know and turn down my application. It
will see that I am paying too much.” But this is not the case.
The Canada Mortgage and Housing Corporation does not do an
assessment.
It is all very fine and well to trust a minister with one's
hopes and dreams, but some caution is required.
1640
Ministers come and go, and not all of them are the same, which
is a comforting thought. But when it comes to big money, they
tend to sound alike. I noticed that. Their constituency is often
the same, irrespective of what party is in office or who is
managing government funds.
I will conclude on this note, but I would appreciate it if, the
next time he tables a purely technical, housekeeping bill like
Bill C-41 before us, the Minister of Public Works would go one
step further and consider the impact such a bill really has on
all the legislation governing or dealing with any government
activity.
The Bloc Quebecois nevertheless recognizes how important it is
for the Royal Canadian Mint to be able to compete and to grow.
The Bloc Quebecois will therefore support, albeit very
reluctantly, the bill at third reading.
[English]
Mr. John Solomon (Regina—Lumsden—Lake Centre, NDP): Mr.
Speaker, it is a pleasure to stand in the House this afternoon to
put forward the viewpoint of the New Democratic Party on Bill
C-41, an act to amend the Royal Canadian MINT Act and the
Currency Act.
I want to make a few comments about our position, what we think
has happened and might happen in the future. I want to put
forward some opinions I received from various Canadians across
the country on the topic of money, currency, and in particular
that part of the currency we refer to as toonies and loonies.
The bill will amend the Royal Canadian MINT Act to update the
terminology for coins in order to reflect the market surge rather
then the metals of which the coins are composed. The amendments
simplify the process for issuing coins by giving additional
powers to the mint and to the Minister of Public Works and
Government Services.
The mint is given the capacity of a natural person and the power
to incorporate subsidiaries and to acquire and dispose of
interests in other entities. I will make some comments about
that in due course. Other amendments are of an administrative
nature. I want to make one reference in particular. It is not
administrative but it may be viewed as administrative by the
government.
Some of my colleagues in opposition have pointed out that the
mint's capability of increasing its capital from $50 million to
$75 million is an important development because the mint will be
basically borrowing extra cash to expand its operations.
We support most of the sections of the bill. It is important to
update the powers of the mint as time goes on and to make sure it
is in line with the powers of other crown corporations. We are
happy with a particular change that occurred between second and
third reading when the bill was at committee.
The member for Winnipeg—Transcona spoke on the second reading
of the bill. He indicated he was concerned that the coins
circulated in Canada would continue to be circulated but any new
issue of circulated coins would be on a 15 day notice. I see the
committee has changed that to sustain the power of parliament to
decide whether or not a new denomination of coin would be
created.
I acknowledge the efforts of the member for Winnipeg—Transcona.
I think that is an important democratic function and an important
responsibility of the House of Commons and of parliament rather
than letting regulation determine whether or not these things
will happen. We have had additional time to consider them rather
than just 15 days before they become law.
The bill provides for this provision. I am pleased to see the
amendment. But every Canadian will be affected by additions or
deletions of coins. We must ensure their needs and concerns are
properly heard.
1645
We have seen the introduction of the loony under the former
Conservative government. It was widely believed at that time and
has been actually proven accurate that the Mulroney government
made pocket change of the one dollar bill. People were quite
upset with that move until of course the Liberals got elected.
They did one better than the Tories who were so roundly rejected
by the taxpayers in 1993. They created pocket change out of the
two dollar bill. So now what that means is that taxpayers have
to earn a lot more money to buy the same goods and services they
purchased earlier and the Liberal government is responsible for
that effort.
The mint will drum up additional business outside the country.
Before I get into that issue I want to make reference to the fact
the Reform Party was quite concerned about a couple of issues,
about the need for fair competition. Of course everyone is
embracing and supporting fair competition.
The hon. member from the Reform Party made reference to the fact
that the Competition Bureau ensures there is competition. The
Competition Bureau is actually called, in the circles I travel
in, not the Competition Bureau but the lack of competition
bureau.
Time after time, whether it is drug pricing issues or gasoline
pricing issues, the Competition Bureau has failed Canadians in
terms of protecting the interests of consumers and ensuring there
is fair competition. In fact, it has done the opposite,
according to the thousands of people I have spoken to.
This legislation was brought in by the Conservatives. The
Liberals endorse it wholeheartedly. The anti-combines
legislation, which existed prior to Mr. Mulroney's getting
elected in 1984, provided power to the Competition Bureau to
investigate price fixing, to investigate predatory pricing
without needing a letter from one president of a company to
another saying let us fix prices. It had the ability to go into a
particular business and investigate without notice whether
allegations of price fixing or predatory pricing were true.
I join with my colleagues in the Reform Party by saying I agree
with their comment with respect to having fair competition. I
believe the only way we can do that is to have a competition
bureau that has some teeth and has some capability to look into
some of these very serious allegations.
I come from Saskatchewan. We have, depending on the year,
approximately 25 crown corporations. What I find incredible with
the federal government is that there is no committee responsible
for holding crown corporations accountable for their actions.
In Saskatchewan I had the honour to chair the standing committee
on crown corporations in the legislature. That committee had the
power to call every year all the crown corporation presidents and
their management individually before the committee as well as the
ministers responsible. We could go for as long as we wanted, not
two hours on each corporation, to investigate and question the
officials and the ministers in charge of those corporations on
matters before the public or matters they were dealing with in
terms of their own crown responsibilities.
Saskatchewan is the only jurisdiction I am aware of in the
Commonwealth that has a standing committee on crown corporations.
That is why in Saskatchewan we have very significant crown
corporations providing very significant services to the people of
Saskatchewan in a very reasonably priced way, in an accountable
way and in a transparent way.
What I would like to see the government do with respect to the
Royal Canadian Mint and other crown corporations is establish a
standing committee on crown corporations so that we as
parliamentarians can have the presidents and their top staff and
the ministers responsible come before the committee to answer
questions which are important and relevant to the business they
are in.
1650
What this does is provide, as a public committee meeting, an
opportunity to make sure the crown corporations' objectives
and missions are being adhered to, that they are transparent and doing
the service to the public they were created to do. I think
that is what we need in the House of Commons.
I am sure my colleagues in the Reform Party support this. We
have a lot of support in the province of Saskatchewan for such a
committee. I think the Royal Canadian Mint, a crown corporation,
would not only continue to operate in a well organized way but
its productivity, efficiency and profitability would be enhanced.
I think that is a very important suggestion.
The annual reports would be on the table. We could ask any
questions pertaining to those annual reports. We could ask any
questions pertaining to the business of that crown corporation
except for matters before the courts or matters pertaining to
human resources for individuals. Those are logical things we do
not want to talk about in public.
It is a similar recommendation such as I made to make the Board
of Internal Economy a public board. In Saskatchewan the board of
internal economy is a public board. The press and members can
come. They cannot ask questions but they can see how the board
operates rather than doing it in secret as we do in the House of
Commons. It is a matter of accountability. It is a matter of
being more accountable to the taxpayers and a matter of making
sure everything is transparent in the business they do.
I also want to note the concerns of small business with respect
to this bill. I am a small business person. Although I believe
crown corporations play an important role in our economy, I
support generally the initiatives of government to use crown
corporations as economic instruments to deliver a program or
service that is necessary. Collectively deliver it as opposed to
individually if that is the mandate of the government.
The mint is located in Winnipeg where the minister responsible
for small business comes from. I believe it is in his
constituency. I used to live in his constituency many years ago
when I was a young student. I know where the mint is located. It
is a very good crown corporation. It provides a very good
service. It employs a large number of individuals and pays them
relatively well. I think that is something we have to continue
to do.
With respect to the concerns of small businesses, they tell me
they want to have in this bill enough notice as well as an
opportunity to consult if any changes are made. I know the
member for Saint Boniface, the minister in charge of small
business, is very much aware of that. I know that in the
minister's consultations with small business he has been told the
same, in particular as it applies to the operation of the mint in
his district.
We are very worried about this. I know that when the loonie and
the toonie were introduced we had a number of small business
people voice their concerns because of the short notice and the
fact they were not consulted in advance and could not prepare
their vending machines. Vending machines are becoming fairly
important these days. We can get coffee from them, soda pop,
food, sandwiches, all kinds of snacks. They are used in places
without cafeterias. I think it is a very important thing to do.
Business people are telling me that when new coins are struck
they should be consulted in advance so they can prepare their
machines because it takes in some areas up to $300 to convert one
machine for a new coinage denomination. Some companies have
instituted some sort of cash box adapters, patented them and they
are selling for around $10 each. Those are things that are a
little more reasonable. But still they need time to convert
those vending machines.
I would also like to make one quick reference with respect to
what Reformers talked about.
They talked about the need for fair competition which I
agree with. I recommended the creation of a standing committee on
crown corporations which they probably agree with. They made
some reference to privatization. There is a good way
to do privatization and there is a bad way to do privatization.
What scares the living daylights out of me and my colleagues and
the people of Saskatchewan is when the Reform Party starts
promoting privatization.
1655
We had a Reform style government in Saskatchewan from 1982 to
1991. That was a Tory government which was a combination of
Liberals, Tories and Reformers. Many are now members of the
Reform Party in Saskatchewan called the Saskatchewan Party led by
the former Reform House leader Elwin Hermanson. He has the same
caucus members who ran the province in 1982 to 1991. They
attended the Saskatchewan party convention.
I want to talk about privatization in Saskatchewan as it refers
to the mint bill. We have experienced firsthand the Reform style
of government in Saskatchewan. It came to power in 1982. We had
the lowest tax rates in the country. We had free dental care for
children 18 and under. We had the lowest cost prescription drug
plan in the world. We had the lowest unemployment rate in the
country. We had no debt as a province. After nine years of a
Reform style privatization government, with 1 million people we
have $15 billion in debt as a result of its privatization
initiatives.
When Reformers talk about privatization the people of
Saskatchewan look at them and just shake their head and say will
they ever learn. Having listened to today's debates, my hon.
colleagues in the Reform Party have not learned a thing, not one
lesson from privatizing and bankrupting the province of
Saskatchewan. Now they want to bring that experience to the
House of Commons and bankrupt Canada as a result of some of their
initiatives.
Canadians will look very closely and think twice before they
support that kind of party with respect to its privatizations.
I will give an example of privatization in Saskatchewan. The
government privatized a Saskatchewan potash corporation worth
over $2 billion. It kept the debt for the taxpayers. It gave
away the assets to the shareholders. As a result of that we have
lost revenues of about $100 million a year to the treasury to
help out programs like health care and education. We have half a
billion dollars in extra debt as a result of that privatization
which the taxpayers are now paying off for the next 40 or 50
years.
We had a reduction in employees in the corporation, an increase
in the profits, but all the profits are now leaving the provinces
to other parts of the world, which is just fine. The other
interesting thing is that when we ran the potash corporation as a
crown corporation the salary of the president was $150,000 a year
Canadian. The privatized corporation is now paying $2 million
U.S. to a president of the potash corporation who is from the
U.S. Guess who the vice-presidents are? They are from the U.S.
and they are all getting millions of dollars in U.S. payments and
working in Canada for a Canadian crown corporation. That is the
legacy of the Reform style government of Grant Devine in the
1980s in Saskatchewan.
That is the bad way to do privatization. Maybe there is a good
way to do it. If a crown corporation is struggling and is not
particularly providing any service to Canadians or any kind of
programs to Canadian we should look at privatizing that to make
sure we have a better service or a better program if that is what
the government decides.
At this point we can more or less support Bill C-41. The Reform
Party will not support this bill. Privatization is one thing.
The Reform member for Elk Island has been pumping a company that
is competing with this crown corporation. He has been supporting
this company. That is fair. But when the Reform Party is
creating policy it always fails to sell its policy in the light
of day. In the backrooms or in the dark, if not telling anybody
both sides of the issue, they are not reasonably bad ideas from
time to time.
When we expose the ideas or recommendations of Reformers to the
light of day we see that they are pushing other motives. I do
not know what relationship anybody has to the company from the
Reform riding of Elk Island, but it is another reason people
should be aware of in terms of why Reformers would oppose the
bill. This is a newspaper story, but the member wants to hear
more about how wonderful Reform style government did in
privatization in Saskatchewan respecting the Royal Canadian Mint
Act.
1700
An hon. member: Tell us about the NDP style government in
British Columbia.
Mr. John Solomon: The NDP style government in
Saskatchewan and the hon. member from the Reform are doing a
fairly good job. They have taken the $15 billion debt of the
Reform Party from 1982 to 1991 and have turned it around. They
have made it very clear that they will continue to be responsible
and accountable for their actions, unlike the Reform style
government of Grant Devine.
An hon. member: Tell us how they have destroyed the
economy of British Columbia.
Mr. John Solomon: A member of the Reform Party is asking
about British Columbia. I would like to know his recommendations
on how to manage a provincial economy when the population is
increasing over a 10 year period by 85,000 or 90,000 people a
year and no additional revenues are committed to infrastructure
or to health programs. He would not know about that because he
probably cannot count to 85,000 or 90,000. If he did, he would
realize that when the population grows by a million over a 10
year period there have to be additional programs, supports and
initiatives by government in infrastructure or transportation.
An hon. member: We have every socialist in the country
feeding off the province.
Mr. John Solomon: The member from the Reform Party does
not know what socialism is because if he did he would not say
what he just said.
However, that aside, I am pleased to see the amendments
undertaken by the government to retain the power of parliament in
this bill. As a result we will be supporting the bill when it
comes to a vote.
Mr. Howard Hilstrom (Selkirk—Interlake, Ref.): Mr.
Speaker, I will reply to the member for Regina—Lumsden—Lake
Centre.
With regard to Reform's economic policy I suggest to the member
that in the 1997 election the NDP put out its policy as to the
economic conditions in Canada and what its solution was. Reform
put out our policies. I see us sitting here with about 60
members after the election and them with maybe 20. The people
judged the economic policies of the Reform Party to be far
superior to that of the NDP.
The hon. member refers to the Reform being associated with the
Progressive Conservative Party of Saskatchewan. My relatives are
all from Saskatchewan. He knows very well, if he had done any
research and looked at Reform Party policies on the economy and
at what Grant Devine did in Saskatchewan, that there is no
comparison. He is lying right here and right now when he talks
like that.
The Deputy Speaker: The hon. member knows that kind of
language is inappropriate. I know he will want to withdraw those
words at once.
Mr. Howard Hilstrom: Mr. Speaker, it slipped out by
accident and I apologize for that. It is not appropriate
language for here.
In any event I would like the hon. member for
Regina—Lumsden—Lake Centre to expand on his knowledge of
comparison between the Grant Devine Conservative government and
the honest economic policies of the Reform Party.
Mr. John Solomon: Mr. Speaker, I thank the hon. member
for Selkirk—Interlake for his question. I am surprised why the
member would not understand the history or the implications of
what happened between 1982 and 1991 in Saskatchewan under the
Devine-Reform-Liberal coalition. I know he would not be aware of
it because as an RCMP officer at that time he was all over the
country except in Saskatchewan.
An hon. member: What coalition was there?
1705
Mr. John Solomon: The coalition was with Elwin Hermanson,
Grant Devine and Grant Schmidt who are all members of the
Saskatchewan Party now. They are Reformers and supporters of the
Grant Devine regime and were cabinet ministers.
I know this is a sore point with the Reform Party. We have had
about 22 elected Reform, Tory, Liberal and officials from that
Devine government, that coalition, who were charged for breach of
trust and other very terrible things about which the former RCMP
officer from Selkirk—Interlake would know more than I. I was
just an MLA at that time and not part of the police force. It
was his colleagues who investigated these people.
I do not know the number, but I think about 15 of them were
found guilty. The Saskatchewan Party is a new party in
Saskatchewan made up of Reformers. Elwin Hermanson, the former
Reform house leader, is the leader of the Saskatchewan Party and
has all these Grant Devine folks in there, those who were not in
jail.
They attended a big convention the other day of about 150
people. By the way, on Saturday one of the provincial ridings in
my federal district, Regina—Qu'Appelle Valley, had a nomination
convention. We had just under 300 at a nomination convention for
one provincial riding with only two people seeking nomination. We
can tell how powerful the Reform Party of Saskatchewan is in
Saskatchewan.
The Reform Party and the party in Saskatchewan of Grant Devine
are basically the same. They put forward the same policies, the
magic policies of less taxes, more services and more jobs. That
is what they promise. Grant Devine did that and the Reform Party
did that. Grant Devine was elected, however, and we ended up
with fewer jobs, incredulous increases in taxes and very few
people working. I believe that was part of the problem.
The Reform Party just embraced this Grant Devine policy. I
should not be warning it not to continue doing that. I should
encourage it to keep pumping that policy because if it does that
it will never get elected. I am very concerned that Reform
members do not remember their history. Somebody once said that
if we forget the lessons of history we are doomed to repeat them.
I am not a teacher by background, but I think it is really
important to remind them of their history. Their history in
Saskatchewan is really bad, corrupt and terrible. It has been
shown across the province that all the things they have
undertaken resulted in fewer people working, higher unemployment
rates and higher taxes for people, which resulted in money
leaving the province and huge debts left for taxpayers.
We in the west are very worried about that. Yes, the member's
arithmetic is right. There were more Reform members elected in
the last election than there were New Democrat members, but that
is the way it goes. We in this party respect democracy. Being
from Saskatchewan, the member would know that there is an old
saying that when you throw a rock in the dark and a dog yelps you
have hit a dog.
Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Speaker, I
appreciate the comments of the hon. member from the NDP, but I
did not hear a lot of relevance with respect to Bill C-41 on the
Royal Canadian Mint.
The member alluded to and analysed the Saskatchewan government
and how it has been very productive in the province of
Saskatchewan. Since we are off on a tangent right now, would the
member analyse the two provincial governments, the one of Bob Rae
and perhaps the one of Glen Clark?
I understand they were both NDP governments that perhaps had
problems with the issues of taxes and job loss and perhaps has a
problem right now with a loss of confidence in the voters of
those two particular provinces, particularly Bob Rae who
unfortunately or fortunately for a lot of us no longer seems to
be in the political sphere. Would the hon. member please analyse
those two governments?
Mr. John Solomon: Mr. Speaker, I appreciate the question
from the member for Brandon—Souris. He always has some great
questions and I think this is a pretty good one.
I can only speak about things that I am familiar with. For
example, I know that the NDP government in Saskatchewan did not
send anybody to jail, whereas the Reform-Tory coalition sent 18
to jail. That is one example. I guess it is not very good.
The Bob Rae government did not send anybody to jail from its
caucus. The Reform-Tory coalition in Saskatchewan sent about 17
or 18 to jail. I may be off by about one or two but it is
approximate.
1710
As for the NDP government in British Columbia, none of its
officials are in jail, at least yet. The Tories and the Reform
in Saskatchewan sent 17 or 18 Tory and Reform MLAs to jail. I
guess I can only compare what I know. To me that seems to be
somewhat balanced.
I know the NDP in Ontario had a bit of a rough ride. The member
for Brandon—Souris would appreciate this immensely because he is
the member of a party that had a rough ride in 1993 in Canada.
They went from government to two members. He can relate to the
anxiousness and the anxiety of the NDP in Ontario.
If we look at the polls the NDP is doing very well across the
country. We are leading the polls in Saskatchewan. We are
leading the polls in Nova Scotia. We are leading the polls in
Manitoba. That is three provinces. We have a government in
Yukon. In British Columbia we have two more years to go, and I
am very confident the NDP in that province will rebound.
Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, I really do
not have a question but I do have a comment.
This is the House of Commons. It is a place with elected
officials. One of the things that really bothers me about this
presentation is the implication and innuendo that the member
used. It reduces the respect that this place can generate.
For example, I had a number of people from the NDP support me in
both the elections in which I ran, including the candidate for
the NDP. I do not think he would want me to say that because of
the presence of an NDP member on my executive I should
automatically be considered a really bad guy. That is my
comment. I think the hon. member is out to lunch.
Mr. John Solomon: Mr. Speaker, I think the member for Elk
Island misinterpreted my comments. I did not make any reference
to him personally by name. I did not make any reference to his
executive. If it has NDP members on it, it has to be a darn good
executive in my view.
In debate we have to look at the facts. In Saskatchewan we had
a Reform-Tory-Liberal coalition in government that was corrupt,
ended up in jail, and they happened to be Reformers.
Mr. Gilles Bernier (Tobique—Mactaquac, PC): Mr. Speaker,
I am pleased once again to be able to speak to Bill C-41, an act
to amend the Royal Canadian Mint Act and the Currency Act. I
just want to get back to what we are here for, and it is not
criticizing each other.
When the minister responsible for the mint first introduced the
bill on May 7, I was careful to go through it with a fine toothed
comb. I saw many important changes being proposed, but I also
identified two items which caused me grave concern.
In the time since I have had a great number of meetings and have
done a fair bit of work on the bill so that I am satisfied now
that most of my concerns have been dealt with. As a result, I am
pleased to say we will be supporting Bill C-41 at third reading.
Today I would like to talk about the process we have gone
through to get to this point, readdress my original concern and
discuss why I now believe it is important for members to support
the bill.
When Bill C-41 was first introduced it contained two provisions
that prevented me from immediately endorsing the bill without
further study. The first of the changes contained in clause 3
would have stripped parliament of the authority to introduce new
coins into circulation or to delete old coins from circulation.
It proposed putting that authority into the hands of cabinet and
streamlining the decision process.
I have always jealously guarded the authority of the Chamber.
Members of the House are the people's representatives.
1715
It is right that having been vested with this authority we
should have an important part in the decision making process of
government. Unless there is a clear and compelling reason for
any power held by members of parliament to be moved elsewhere, I
oppose any effort to diminish the authority of the Commons.
This is not an academic discussion. It is very likely that at
some point in the near future members of parliament will be asked
to consider whether they wish to replace the $5 bill with a $5
coin. It is also quite conceivable that they will have to decide
if having a penny in circulation serves any useful purpose or if
it should be retired. As it stands now, if the government wishes
to take an existing coin out of circulation, or bring in a new
coin, it must introduce legislation for consideration by
parliament.
As with all bills such as the one before us today, there must be
a full public debate with committee hearings and ultimately a
public vote before such a change can take place. This bill
proposes turning this decision over to cabinet. It would require
the minister to give 15 sitting days notice before cabinet makes
the decision. However, it would have been powerless to stop any
decision the public found undesirable and that is what I oppose.
Government works best when it bases its decisions under the full
scrutiny of the public eye. It is not pretty at times, but it
works.
For example, take the decision to replace the $1 bill with the
$1 coin back in 1987. I remember that there was great discussion
over the efficacy of having the loonie. On one side of the
discussion we had the vending machine lobby and the bus companies
which promoted the convenience of having a $1 coin. On the other
side was a diverse group of people who were concerned about
replacing the dollar for reasons that ranged from nostalgia to
concern that pant pockets would have to be reinforced because
coins were too heavy. Regardless of what our individual feelings
were on that issue, it was right for us to have that debate in
the House, the most public of forums. It is right that we should
have a debate here if there are to be similar changes to Canada's
currency in the future. Understandably, the fact that Bill C-41
would take this decision away from parliament troubles me a lot.
I was fortunate enough to have a briefing on the bill in June by
officials from the Royal Canadian Mint, including the master of
the mint, Danielle Wetherup. When I asked Mrs. Wetherup why
the government would consider removing from members of parliament
the power to approve a change in the country's coinage she was
able to give me some history behind this portion of the bill.
Apparently, when parliament was dealing with what was then Bill
C-82, the act to replace the $2 note with a $2 coin, the master
of the mint received some negative feedback from members of
parliament on the process involved in approving the new coin. At
that time it was in late June. The days were very hot. The
government had a very busy agenda. The committee room where the
government operations committee was reviewing the bill was not
air conditioned.
In the heat of the moment, if members will pardon the pun, and
faced with a large number of bills to approve in the final days
before the House recessed for the summer, some members of
parliament observed that Bill C-82 was not the most important
piece of legislation before them. They wondered out loud if
there was not an easier way to deal with what seemed to them to
be a straightforward change.
Understandably, mint officials made a note of this. When it
came time to update the Royal Canadian Mint Act, as is done every
20 years or so, they decided to propose changes to simplify the
approval process for changes in coinage in response to
suggestions by members of parliament at that time. The result
was clause 3, as it appeared in the original printing of Bill
C-41. However, members will note that clause 3 has changed.
For reasons that I have already explained, it was unacceptable
to me that the decision to change Canada's coinage should have
been taken from parliamentarians. Therefore, on behalf of my
party I drafted a amendment to leave that decision where it
belonged, in the hands of the peoples' representatives.
1720
I shared my idea with Mrs. Wetherup, the master of the mint, on
two occasions, during our first real briefing with members of
parliament and during the hearings of the natural resources and
government operations committee into Bill C-41. Throughout the
committee meeting she rightly stated that the final decision as
to whether the government would support the amendment rested with
the minister. She indicated during our first meeting that since
the original idea for clause 3 had come from members of
parliament the mint would not oppose leaving the decision making
process the way it was if, on reflection, members of parliament
believed it should remain that way.
I also spoke to the minister's office and to the critics from
other parties about my amendment. I argued the importance of my
amendment and said that members of parliament must continue to
have an important role in the government decision making process.
Apparently they must have found my arguments to be persuasive.
When I presented my amendment in committee last Tuesday, it
received the unanimous support of the members of parliament
present. I acknowledge and thank all members of the committee
and the minister for their considered, non-partisan support of my
amendment.
Clause 7 is another provision of Bill C-41 that concerned me. It
proposes increasing the borrowing authority of the mint from its
present $50 million to $75 million. This proposed change
troubled me because of a new venture the mint is undertaking in
building a new facility in Winnipeg to manufacture coin blanks.
Clause 7 worried me principally because I thought the mint would
use this newly acquired borrowing power to finance this poorly
thought out venture and put a successful Canadian company out of
business. I did not realize at that time that the mint financed
this $30 million venture in March and that the building which
will house the coin plating facility is nearly completed. It is
clear at this point that Bill C-41 has no bearing on the mint's
decision to build this new facility. Therefore, I must separate
my opposition to this scheme from my position on the bill and
evaluate clause 7 on its own merits.
Do not mistake my support of this bill as an endorsement of the
mint's decision to get into the manufacturing of coin blanks. I
oppose that decision for two reasons. First, the facility will
put the Royal Canadian Mint into direct competition with a
successful Canadian supplier of coin blanks, Westaim of Alberta.
Westaim has supplied the mint with coin blanks for 35 years. It
employs 110 people at its plant in Fort Saskatchewan and the
entry of the mint into this industry will jeopardize this Westaim
division and its 110 employees.
Second, this is a risky venture for the mint to undertake.
Because it has borrowed the money on taxpayers' credit, it is
also risky for Canadians. There is currently a 30% to 40%
oversupply in the world's coin blanks market. If the entry of
the mint into this market does not drive Westaim out of business
and put its 110 employees on the unemployment line, it could go
spectacularly down in flames and take millions of taxpayers'
dollars along with it. Industry experts agree that the market
for coin blanks will experience a slight blip in demand as the
new European currency starts, but it will then continue its
steady decline as electronic transactions become more popular and
the need for coinage and paper money decreases.
As if poor markets were not enough, the costs of getting the
mint into the coin plating business are enormous. The $30
million dollars borrowed by the mint in March is just to build
the Winnipeg plant. Start-up costs are substantial for a new
competitor in a mature to declining market. The Royal Canadian
Mint will have to compete against established, experienced,
well-entrenched competitors which have had decades to build their
expertise and economies of scale.
For example, consider employee costs. The process of
manufacturing coin blanks requires highly skilled workers. There
are only two ways to obtain employees such as this. The first
way is to spend an extraordinary amount of time and money to
train these people.
The other option is to hire them away from competitors by
offering them more money. Either way, employee costs are going
to be higher than those of competitors, and in a commoditized,
price sensitive industry this is bad news.
1725
Not only will the mint have to contend with its high cost
structure, but like any brand new business it will make many
mistakes.
Thus, I fear for the Royal Canadian Mint, I fear for the
employees of Westaim and I fear for the taxpayers who are, so
far, on the hook for $30 million.
However, I realize now after considerable debate and
consultation on Bill C-41 that these are two separate fights.
Although I will continue to search for a resolution to the mint's
entry into the coin blanks industry, I can happily say that we
have won the fight on Bill C-41. Now that the committee has
fixed the problem with the bill, it has removed the final
obstacles to my party's support.
In closing, I would like to again thank the members of the
Standing Committee on Natural Resources and Government Operations
as well as the minister for helping to get my amendment approved.
I would like to thank Danielle Wetherup and the other officials
of the mint who were kind enough to meet with me on a number of
occasions, both privately and publicly, to review this bill and
to discuss my concerns in detail.
Although, as I have mentioned, I do not agree with everything
the mint is doing, I do agree with the changes to the Royal
Canadian Mint Act and Currency Act as proposed in this bill.
I have no hesitation in supporting this bill and I would urge
other members to do the same.
Mr. Werner Schmidt (Kelowna, Ref.): Mr. Speaker, I would
like to congratulate the hon. member who just entered the debate.
I thought his analysis of the function of the mint was very
interesting and very good.
However, could he address the question of whether he finds his
support of the bill, generally, not to be inconsistent with his
criticism of what the mint is doing?
Would he agree that clause 2 of the bill, which amends section 4
of the Royal Canadian Mint Act, expands rather dramatically the
power of the mint? It allows precisely what he just said in his
speech. He disagrees with what the mint is doing, mainly getting
into the coin plating business. This bill allows that to happen
and gives the powers to the mint to do precisely that.
While he may disagree with the mint doing that, the legislation
being proposed permits the mint to do precisely what he says he
does not want it to do.
That is exactly the point and why I object to that clause. The
hon. member, on the one hand, says he disagrees with that; on the
other hand, he supports the amendment. Could he clarify the
apparent contradiction here?
Mr. Gilles Bernier: Mr. Speaker, I want to thank the hon.
member of the Reform Party for his question. It is a very good
question.
I have been in business for over 20 years. I said from the
start that government should not be in business. The mandate of
government is to manage taxpayers' dollars, and I have not yet
seen this government do that.
When there is a bill in front of the House, members do not have
to agree with everything in the bill. They can work hard along
with their party colleagues to try to make amendments and to
change some provisions that would make the bill acceptable. That
is what I did.
There are some flaws in the bill. However, being 43 years old,
I believe in a life of compromise. That was the way I was
brought up. My dad always told me that if someone wants to get a
little in life they have to be able to give a little. I strongly
believe that.
It is true that there are still some flaws in the bill.
However, just because there are a few flaws here and a few flaws
there, whether we vote for it or vote against it, the bill is
going to pass anyway.
I fought to get the amendment I wanted and I won the amendment.
The amendment is good for members of parliament because it keeps
the power here in the House of Commons and it is good for
Canadians in general.
Ms. Carolyn Parrish (Parliamentary Secretary to Minister of
Public Works and Government Services, Lib.): Mr. Speaker, I
have a comment to make. I would like to congratulate the member
opposite. It is not often that someone gets to make their mark
in this place. The member has made his mark today as well as at
committee. I think he has done a very reasonable job.
1730
As the member just explained, there are parts in the bill he
does not like, but he got in there and negotiated rather than
just being negative. I really appreciated it and I would like to
express the appreciation of the minister on his co-operation.
Congratulations.
Mr. Gilles Bernier: Mr. Speaker, I just wanted to comment
on what the hon. parliamentary secretary said. I am very
flattered. It is not often that this happens in this place.
I believe that regardless of which political party we are from,
we were sent here by Canadians to represent Canadians. I am here
to represent the people of Tobique—Mactaquac in New Brunswick.
In my portfolio of public works and government operations, I am
here to represent all Canadians, whether it has to do with Canada
Post or the Royal Canadian Mint. It is one of the biggest
departments in Canada. It includes Canada Mortgage and Housing
Corporation and a lot of others.
Whether one is a Reformer, an NDP, a Bloc, a Conservative or a
Liberal, we have to work together in the House to make things
happen for Canadians. That is what Canadians deserve and that is
what we have to do for them. I hope by the time the next election
comes around people will see the work that I do and they will
elect more Conservatives.
Mr. Rob Anders (Calgary West, Ref.): Mr. Speaker, I
have been listening to all of this debate today. It shows how
insidious Ottawa is that people can come forward with a bill that
competes with the private sector, uses taxpayers to do it, and
people in the House will stand and support it and help to shut
down private businesses.
This is not the only time this has happened. Canada Post uses
its dollars, the dollars that hon. members and other taxpayers
will spend in terms of regular mail, to cross-subsidize and
compete against people in the courier industry and against people
in the private sector who deal with e-mail when Canada Post
delves into that for the first time.
Once again we have the situation of the mint using taxpayer
dollars to edge out private competitors. That is the type of
wrong-headed philosophy that has got us into the debt that we
have. As well it has been responsible for limiting and curtailing
business possibilities and entrepreneurship.
I do not know how people can reasonably stand and be in favour
of edging out private business.
Mr. Gilles Bernier: Mr. Speaker, again the hon. member
from the Reform Party has a good question but he is way off base.
He does not know what he is talking about.
The reason I am saying that is the Royal Canadian Mint is
building a plant in Winnipeg for a price tag of some $30 million.
The mint is not using taxpayers' money. It has borrowing
authority. It borrows from banks. A person who wants to buy a
car does not come to the government, that person will go to the
bank. That is what the Royal Canadian Mint did.
The mint is asking parliament to increase its borrowing
authority from $50 million to $75 million. The plant it is
building in Winnipeg was started last March, before presentation
of this bill. The mint went to wherever it went and borrowed the
money. It is not taxpayers' money. There is a cliche in that.
If the Royal Canadian Mint makes money, Canada wins. If the
Royal Canadian Mint, which is a crown corporation, loses money,
the government is liable and the taxpayers are going to pick up
the tab. The money used to build that plant in Winnipeg is not
taxpayers' money, it is money that the corporation borrowed from
an outside source.
Mr. Rob Anders: Mr. Speaker, it is a crown corporation.
Whether it borrows that money or however it comes by it, that is
eventually a public debt.
1735
This country has a number of other crown corporations. For
somebody to stand here today and say that crown corporations do
not somehow involve public money, that is not the definition I
understand crown corporations by. Ultimately if they have
problems, it is the taxpayer that is left holding the bag.
Mr. Gilles Bernier: Mr. Speaker, I said that we are
debating Bill C-41, an act to amend the Royal Canadian Mint Act
and the Currency Act. I am not talking about other corporations.
I am talking about the Royal Canadian Mint which is a crown
corporation.
That corporation itself does not get money from the government.
The mint has borrowing authority from the government to go
outside and borrow the money it needs. I do not know where the
hon. member from the Reform Party is coming from when he says it
is the taxpayers' money. It is not taxpayers' money. It is
borrowing money from a bank. It is the bank that owns the Royal
Canadian Mint until the loan is paid. What is wrong with that?
It is a business deal.
Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, I am again
honoured to stand in my place here in the House of Commons to
represent my understanding of what is good for Canadians and to
represent also the needs and aspirations of a number of people in
my riding. That certainly does apply in the case of Bill C-41.
I cannot help but begin my speech by saying that the member from
the NDP who spoke sure did drift a long way from the intent of
what the bill is about. I was very disappointed that he allowed
himself to be reduced to getting into a whole bunch of innuendoes
that does not fit this place. It is disrespectful of what the
House of Commons represents as well as what we as individual
members are to do here.
I want to talk about the various implications of the bill. I am
sure most members are well aware that as with almost any bill
there are some good parts and some bad parts. I would like to
use the first few minutes of my time to talk a bit about the
process in terms of how bills are brought in and how these
decisions are made.
It is very important for the government, whichever party it is
that is governing at the time, to listen very carefully to people
who have problems with a bill or motion. Usually it is government
bills. The government should pay close attention when we have
some legitimate concerns.
I would like to congratulate the hon. member for
Tobique—Mactaquac. He is indeed an honourable member of the
committee. It has been good to work with him, although I will
admit that I was there as a substitute and I am not a regular
member of that committee. The member, by compromising, did win
one point.
I want to throw out the question: Is that really what we ought
to be doing? Should we really be selling out on five items in
order to gain one? That is what we are reduced to. It does not
matter whether the members are on the opposition side or whether
they are backbenchers on the Liberal side. The instructions that
come to the committee are from the minister, the deputy minister
or whoever it is in the department. We detected that in this bill
as we have seen it so often before.
Yes, this amendment was put forward and yes the hon. member
talked to other members about it and he was able to persuade
them. But the member himself said that he would like to thank
the minister for being open to his amendment. One person. I
know, we balance this. The minister is ultimately responsible
for the operation of the department. That is true. There is a
lot of obligation on his part. But in this particular instance
we also need to recognize that there are some concerns beyond
just this one that got horse traded into existence. I wish there
would have been a greater openness.
1740
I hesitate to do this so soon before the joyous season of
Christmas, but I have to admit that I sometimes despair of the
process used in this place. I really wish we had a much more
open and more democratic way of doing these things.
Speaking about this bill, the first issue I am going to talk
about is the one that causes me a great amount of concern. The
mint is a crown corporation, but this bill gives to the mint new
rights and powers which exceed what it had in the previous act.
It might be illustrative to read the amendment which we know is
going to be passed. Once the government decides that it is going
to do something, that an amendment is no good and another one is
okay, we know the Liberals will pass it based on previous
experience and knowing how they operate.
The bill says that in carrying out its objects “the mint has
the rights, powers and privileges and the capacity of a natural
person and may in particular” and then there are several things
listed. One of the things the mint may do in particular is it
may procure the incorporation, dissolution or amalgamation of
subsidiaries and acquire or dispose of any shares in them.
The mint as a mother corporation may have a whole bunch of
subsidiary corporations. To me, that is fraught with danger.
When there are subsidiaries and subsidiaries and so on, it
removes accountability further from the minister and hence from
this place and hence from the people.
The bill will permit the mint to acquire and dispose of any
interest in any entity by any means. When somebody says “I am
going to give you the right to do anything that you want by any
means you choose” I have a bit of a problem with that.
Of course, the preamble says it must use this power in order to
promote the well-being of the mint in order to carry out the
objects of its incorporation. The mint may buy a corporation or
it may set one up by any means it wants. Perhaps it would pay
$29 a share for a little subsidiary corporation that it wants to
own. Then it can dispose of it by any means that it wishes. All
one has to do is use one's imagination on how this could happen.
The very subtle thing here is it would permit the mint, using
the backing of the government as its financial base, to procure
anyone who dares to compete with it and then to dispose of them
by basically shutting down the business. That is scary. We need
to be careful about that.
The next thing listed that the mint might do also has all of
these all-inclusive terms. The mint can generally do all things
that are incidental or conducive to the exercise of its powers
and the bill talks about the coins of the currency of Canada, the
coins of the currency of countries other than Canada, gold,
silver and other metals, and also metal plaques, tokens and other
objects made or partially made of metal. Generally the mint can
do all things that are incidental.
If I were to allow my imagination to run freely, and I do not do
this often, I usually have a disciplined mind, but if I were to
just let it run a little freely, one of the things the mint has
to do is to move its product from place to place. I can see that
it might want to have a subsidiary trucking company or perhaps it
might want to buy a railroad or two. I am exaggerating of
course, but this bill would allow the mint to do that if it so
chose.
It is something we really need to guard against in giving a crown
corporation this kind of power. There has to be a continued line
of accountability and approval related directly to what is good
for the people.
1745
There is a section that has to do with non-circulation coins. We
know there are a number of coins produced every year, coins for
medals and coins for commemoration. I imagine we will be
inundated with coins at the millennium. I have read a few
articles on that topic. In 1867 the country was born and in 1967
we had coin for each province to commemorate. It was a series of
quarters. I imagine this can happen again.
Medals and non-circulation coins and collectors coins may be
determined both in characteristics and denomination by governor
in council, which means the minister can authorize it. It can be
announced and that will be the end of it.
When it comes to circulation coins, happily the amendment from
my colleague from the Conservative Party did gain approval and
certainly with our support as well. There is a danger when
circulation coins are brought in or removed that the people could
be ignored in the decision. One thing does concern us, the
amount of public debate and accountability when characteristics
of coins are changed. As the coin business goes this also is
very important to Canadians. There are literally thousands of
people use coin operated equipment. When a coin is changed in
design or structure, that has implications to machines that
accept coins as payment.
There is a cost saving measure now to steel plate coins with
nickel on top of them so they would be nickel plated steel. When
that happens the density of the coin changes. Any mechanism in
the machines to detect whether this is a genuine quarter or just
a slug will be affected. I have talked to the administrative
people in the mint. They are fine people. They are friendly. I
found them very easy to talk to and I am sure they would make
sure that when they changed the composition of coins or the shape
of coins they would pay attention to this. But there is nothing
here that requires them to so. It just says they can do whatever
they want to in order to pursue their own objectives, presumably
to make money for the mint.
Our penny has changed in the last couple of years. It went from
a 12 sided coin to a fully round coin. Of course we do not use
pennies except in Swift Current, Saskatchewan. I do not know if
they still do.
In places around here you can pay one dollar for 10 minutes in
parking meters. Swift Current had 12 minutes of parking for a
penny. I could not resist the temptation, though I was just
going into the post office and back out, I plugged in five
pennies because it felt so good to get an hour of parking for
five pennies. That was several years to.
1750
Municipalities that have parking meters need those meters
adjusted if the coin composition changes, if the shape changes or
if the weight changes in order that the parking meter will accept
the appropriate coin.
I think it is a ripoff at Ottawa's airport right now where it
wants us to put our credit card in and then dings us for a dollar
every 10 minutes. To me that is a huge ripoff because we only go
there to pick someone up. To rip people off that high is not
acceptable.
That is a diversion almost as far away as my NDP member so I had
better get back on to the list of things I am concerned about.
Included in this act are a definition and a few little changes
on what constitutes legal tender. Everyone once in a while we
hear someone who is fed up with a big bill they got so they pack
up five big pails of pennies and pay the bill with pennies. The
person to whom they are paying it really does not have to receive
it because legal tender is limited, as it always has been.
Usually they accept it and the guy gets his day in the sun and
his picture in the paper.
However, the limits are also given. For example, Mr. Speaker,
if you owed me $40 you could pay that with $2 coins but you could
not pay it with $1 coins. Those limitations are given here.
Using $2 coins is limited to $40 and using $1 coins it is limited
to $25. Using 10 cent pieces, quarters and 50 cent pieces is
limited to $10. Using nickels is limited to $5 and using pennies
is limited to 25 cents. The person can actually demand currency
other than pennies for any debt owed which is greater than 25
cents. I expect that sometime soon we will have a move to remove
the penny since I think its usefulness in this inflated era is
reduced in value and I am not sure we should maintain it.
Perhaps it should become a giant collector's item. I would
certainly favour that.
I want to say something now about the mint and its production of
its own blanks. This does impinge on the Westaim Corporation
which operates in my riding. I have spoken on this topic before
and it is a continued distress for me. I have talked to both
sides. I have talked to people from Westaim and I think they are
very fine people just like the people in the mint.
There are certainly two sides to this debate but there is one
side I think really needs to be emphasized. Even though one can
argue it is not borrowing from the consolidated fund nor is it
taking money directly from the taxpayer, it is a government
guaranteed loan. This legislation states that it may borrow now
instead of a maximum of $50 million up to $75 million and may get
it from either the consolidated revenue fund or from any other
source.
Of course for the building of the plant in Winnipeg it did use
other sources. It borrowed $31 million through the sale of
regular financial instruments and received a very good rate. Why
not? If I as an investor wanted to put some money somewhere I
know the mint is a really safe place to put it. I am willing to
accept a lower rate of interest. The mint gains by that and by
being backed up by the government and the investor is a
beneficiary because that investor knows the mint is not going to
go broke unless the whole country goes broke. I suppose that is
always a possibility but it is much more remote than for other
corporations.
The coin plating plant is competing with private enterprise,
competing with the job that 100 people in my riding have been
doing successfully for 30 years, with the backing of the Canadian
dollar, including the taxpayer dollars that have been collected
from Westaim and its employees.
1755
They are forced as taxpayers to back up their very competition
that is driving business elsewhere. I find this very
distressing. It is a faulty principle. The government is
getting out of business. It has privatized with NavCan. It has
privatized a whole bunch airports. We even have portions of the
military forces being run by private groups on contracts. In
this instance it is going in the opposite direction. It is wrong
headed. It is wrong for the government to be in competition.
Mr. Philip Mayfield (Cariboo—Chilcotin, Ref.): Mr.
Speaker, I compliment my colleague from Elk Island for his
thoughtful and disciplined look at this bill and the explanation
he has given.
A number of thoughts came to my mind that I would like to raise
for his consideration. He mentioned NavCanada coming out of
Transport Canada. In that instance we see private pilots who
will begin to pay $60 per year for their airplanes to use the
navigation system. But they are not getting anything back for
that. They are still paying the same amount of taxes on aircraft
fuel.
Another instance is the post office. We have seen how that
crown corporation has gone into the courier business in direct
competition with other couriers. It has the advantage of being
the only corporation that distributes first class mail. It has
the resources of the government to compete.
There is a general thrust of the federal government taking more
and more discretionary and using that power to open
up a competitive force against private business. My colleague
mentioned the discretion of the minister in this legislation to make
decisions without reference to parliament. The other side to
that kind of discretionary action is it diminishes the powers
of the parliament which is directly responsible to the people.
This lack of discretion and this opening up of the competitive
front against private industry is something that truly concerns
me. It seems to work against the best interests of not only
corporate Canada but individuals who are attempting to make a
living and support their families and their children.
I would like the member to comment on this whole thrust of the
government's increasingly taking more and more discretionary
power and by the same token reducing the authority,
responsibility and accountability of parliament to the Canadian
people.
Mr. Ken Epp: Mr. Speaker, there is a balance to be
reached here. I am not one to say the government should not do
anything. I spoke against it building this coin plating plant
because there is a very fine plant in business. It has a very
long history of producing excellent coin blanks not only for
Canadian use but across the country. I do not see any need for
the government to get into that business.
There are things that government should be doing. As a people
there are things we can do collectively through our government
more efficiently than having everything privatized. For example,
the post office as a crown corporation is an entity that can do a
good job for the Canadian people. In some instances the
individual outlets of the post office have been privatized. They
are put out to tender.
1800
I have heard both sides of the story. Some people say that it
is great they can go to Shoppers Drug Mart at 10 p.m. and can get
postal services, something they could never get before. Yet
there are other people who say they cannot get the service they
used to have because the people sometimes are not trained, their
regular post office people have gone away and somebody else from
cosmetics is filling in and they do not know the answers. There
are some problems.
As parliamentarians and as a government we have an obligation to
account to the people of Canada how we are administering their
tax dollars and how the corporations that are run on their behalf
are operated. It is not totally one side or the other.
I would not want to see everything in the country privatized,
but I certainly have objection to the government using income
from taxpayers and from corporations to run in direct competition
with the people who have paid the taxes in the first place.
I remember many years ago there was a move in Saskatchewan where
I grew up. There was a guy who had a good business—he supported
his family with it—running a bus from Battleford up to Meadow
Lake. He made a run a day and he always had enough passengers
and freight that he could fill up his bus. He made the run and
everybody was happy. He made a living on it.
Lo and behold the Government of Saskatchewan, the NDP government
that likes to run everything on behalf of the people, bought the
business. It gave fine service as far as I know. The service
was not diminished but it lost money ever after that. Every year
it posted a loss on that run and put this guy out of his job.
That was a wrong decision.
Mr. Werner Schmidt (Kelowna, Ref.): Mr. Speaker, I was
pleased with the hon. member's comments, particularly the
rational way in which he analysed the bill.
How would he apply the general principle that government should
do those things and only those things that the people cannot do
as well or better themselves? This is a fundamental principle.
The government should do things. I agree with the hon. member
that there are things the government can do which the people
cannot do for themselves or cannot do as well for themselves.
Could he elaborate on that a little more?
Some of the crown corporations become an end unto themselves.
They serve their own ends. They are no longer filling a gap or
doing that which the people cannot do as well. They are taking
jobs away from people.
It is this principle we have to look at, particularly with
regard to proposed clause 2 of the Royal Canadian Mint Act which
expands those powers to where the act says the mint can buy
anything, do anything, and so on.
Mr. Ken Epp: Mr. Speaker, this is a real challenge
because it is a balancing decision.
A couple of general principles could be applied. One I would
use is that if there has been or is already a private firm or
competition among private businesses, the government should stay
out of it. If it is already being done and done well, the
government should simply stay out of it as a matter of principle.
That is a principle of government. It is in place but the
Liberal government is ignoring it.
It is supposed to be a principle of governing that it does not
compete with private enterprise. On the other hand we have those
situations where the government can do best. I think of an
example which relates back to my youth a long time ago. I
remember when I grew up in Saskatchewan that my dad was the
chairman of the Bode telephone company.
Members have probably heard of Alberta Government Telephones and
B.C. Government Telephones. Now they are evolving into the
different names and we have Telus. Before Saskatchewan
Government Telephones ever came along there were literally
thousands of individual telephone companies spread around all the
provinces. My dad was the chairman of the local one and there
were five subscribers. It was a big company. We had five people
on the line and two longs and a short was us.
1805
My grandfather was with a different company, the Peel telephone
company. If we wanted to phone my grandfather we had to dial one
long, which was the operator. She would hear this as sat in her
little office in Swift Current. Everyone has seen Lily Tomlin do
this. Well there she was in Swift Current pulling the cord out
and connecting our line to Peel. Then she would dial grandpa's
number. He would answer, or grandmother would answer, and we
would be able to talk to them.
That was very inefficient and going nowhere. What happened in
each province at least out west is that all these little
individual companies got together and formed an organization that
would allow the whole province to do it together. It was done
under the auspices of the government. It was a fine co-operative
effort on behalf of the people. At that stage it was a totally
legitimate way of doing things.
That is probably no longer the case. With communications being
what they are, it is probably better to let free enterprise and
competition rule.
Mr. Rob Anders (Calgary West, Ref.): Mr. Speaker, I had
to get in my two cents worth on this issue. I had to listen all
day to members justify how a crown corporation should have access
to consolidated revenue funds. This is my duty day so I had to
get up to give my piece.
There are three reasons I have problems with the bill as it
stands. Under the bill $75 million in taxpayer dollars will be
used for a guaranteed loan through the consolidated revenue fund
or any other source. That is how it is worded. At the end of
the day that means taxpayer dollars are being used to prop this
up. If it were to go belly up, the taxpayers would be left
holding the bag.
What is so insidious and evil about these types of things is
that it is actually taxpayer money, money people pay out of their
own wallets, that is being used against them. I have often
maintained that it is actually better to burn a million dollars
than it is to give it to the government. This is a small
insidious case but nonetheless it is a classic example of what
happens in this place.
People pay their good hard earned money into this place and it
is used against them. The people who are employed by a company
like Westaim will see government dollars being used to try to
shove them out of the marketplace. That is what is evil about
it. There is a private sector company performing the task of
producing blank coins and the government is going ahead and
putting it out of business, shoving it out of the way.
If this were just one example it might fly and people would not
pay it any heed or any attention. People like me would not get
up to speak. Unfortunately this is just one among many examples.
There is the Royal Canadian Mint. Canada Post is trying to
shove out people with e-mail. Canada Post is trying to shove out
private sector competitors for parcel delivery. Canada Post is
trying to shove out courier competitors. Canada Post is shutting
down Overnight Express in Calgary. It was delivering mail in the
T2P area code downtown for a fraction of what Canada Post does it
for and guaranteeing mail delivery overnight. Canada Post shut it
down because it has a monopoly.
There is another example in training programs. Henderson
Business College was operating in the city of Calgary. For
decades it provided good training for those who were looking to
improve their typing skills and their abilities in various
business related areas. The government subsidies came in and the
universities and colleges that had access to all the public funds
in the city of Calgary, in the province of Alberta, were edging
out private sector businesses. It kept going ahead and
developing curricula and programs. It ate away at private sector
businesses and eventually shut them down. Henderson Business
College shrunk. It shut down.
It used to have two offices. It went down to one. Then it went
out of business. That was because of the insidious type of thing
we have where the government uses people's money to put them out
of business. It uses their own taxpayer dollars to put them out
of business.
1810
I remember this only too well in the city of Calgary when
Petro-Canada was nationalized and Petrofina was brought together
with some other companies. The government went ahead and used
government dollars to establish the tallest oil and gas building
in the city of Calgary just so that the prime minister of the
day, Pierre Elliot Trudeau, could remark with pride that
Petro-Canada towered above its private sector competitors that
did not have access to the type of dollars and the endless
taxpayer pocket to which the Liberal government, the Liberal
administration of the day, had access.
That is the type of problem I have with the bill, with
guaranteed loans and with shoving out private sector businesses.
It hurts private sector businesses with their own hard earned
taxpayer dollars.
Another aspect is that the government is trying to establish an
arm's length relationship. It is doing it time and time again,
whether it is with Revenue Canada or a whole host of other
things. It does not like the idea of ministerial accountability.
It does not like the idea of parliamentary supremacy in being
able to question the government on some of these things. It
continually goes ahead and moves them further down the line.
Liberals like to put them at a further and further distance from
themselves so that when problems arise and the opposition points
them out and puts forward amendments they can say “Don't worry.
Trust us”. Years down the road once it has established an arm's
length relationship we see problems that we said would happen.
Then the government says it is not its problem any more, that it
is an agency or something beyond a crown corporation. We cannot
touch the government any more. The minister is not accountable.
There are three good reasons to oppose the bill. The first is
taxpayer money being used as a loan guarantee. The second is
public dollars, taxpayer dollars, business dollars, being used to
shut down private enterprise to be able foist the public sector
on them. The third is the whole idea of lessening accountability
and creating a greater distance with arm's length relationships
and cutting down on ministerial accountability.
Ms. Carolyn Parrish (Parliamentary Secretary to Minister of
Public Works and Government Services, Lib.): Mr. Speaker, in
the last hour I feel like I have sat through the good, the bad
and the ugly. The good is over there and the bad and the ugly
are over here.
I do not understand if the corporation is being defended so
severely and is being put out of business why—and perhaps the
member can answer this—it can only produce about 20% of what the
mint needs. In actual fact the mint has to go outside Canada to
buy plated blanks to do the job. If we are shutting them out of
business, perhaps the member could explain to me why the
corporation cannot supply 100% of the blanks we need at this
time.
Mr. Rob Anders: Mr. Speaker, as I understand it, Westaim
could produce all the blanks the government needs but right now
that contract only takes up about one-third of its capacity. The
parliamentary secretary should not try to use the capacity of
Westaim as an excuse for trying to shut it down and put it out of
business. That has nothing to do with it.
Mr. Werner Schmidt (Kelowna, Ref.): Mr. Speaker, I thank
my colleague for entering into the debate in the direction that
he went. I thought his arguments were rather lucid and very
concise on the three points. I thought they were excellent.
I would like him to explain a bit further how he accounts for
the potential shift in terms of administration in the mint today.
I think he would agree that the mint administration today is
exemplary. It has turned the mint around. It is now a
profitable organization. It has good personnel relationships. It
has a good operating plant. It is doing the job correctly.
With that kind of consistency and quality of management all the
way we would not have to be too concerned about the policy, but
the bill shifts the policy and gives all kinds of power to
anyone.
The question becomes what sort of person will take over the
management of the mint which is operating very successfully
today. I have nothing but respect for the mint master, but the
question is what happens if the mint master moves aside.
1815
I wonder if the member could talk about that a little.
I would also like him to address the question of what happens if
something goes awry and some of the things we have mentioned here
today actually take place. How does one reverse legislation once
it has gone to a point where this becomes a pattern, almost a
culture that develops within a crown corporation? How does one
change that culture once it is in place?
Mr. Rob Anders: Mr. Speaker, that is part of the problem
here. The government always thinks that more government is the
answer and the solution. Too often we find that it is actually
government that is the problem. It thinks that by expanding it
and making it bigger somehow it is going to make the problem go
away. Often we find that more government involvement makes the
problem bigger rather than smaller.
My colleague raises a very good point. What if a very competent
mint master moves aside and somebody else comes into play?
The government and the taxpayers then stand up and proudly beat
their chest and say that this is an entirely profitable venture,
for who better to loan money to than the mint, the one making the
money. I guess there is not a much better loan than that. One
cannot have more security on one's assets than from the people
who actually produce the money themselves.
However, that is based on the current mint master. If that
person moves along and somebody else who is not as competent
takes over that administration then the taxpayers are the ones
who are left holding the bag for any problems or mishaps.
It wants to go ahead and create this system that will shove out
and hurt a private sector competitor. I remember the talks we
had over hepatitis C and tainted blood and whether the government
should be able to, in a sense, operate in monopolies like this.
When the government does things like that, ultimately the
culpability, the responsibility, falls entirely on it.
Private sector competitors have the ability to operate in the
marketplace but if there are problems with the marketplace it is
not entirely the government's fault, for there are other players
in the field. However, if it is the only player in the field
then it is the government that is entirely culpable and
responsible for what goes wrong.
I do not think the government wants that responsibility but
today in this bill it is going to grab for it.
Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, I have one
more little comment that has to do with the actual competition.
What would happen if the mint were to produce all its own
coinage out of the Winnipeg plant? We hear that it took only 20%
of its supply from Westaim and 85% from elsewhere. That is
because of the bidding process, NAFTA and other suppliers. There
have been a few occasions where I understand the timeline given
was insufficient for Westaim to deliver on a timeline that was
not usual. It had a real fast order and Westaim said it needed a
little longer to fulfil it so it went elsewhere. That is fair
but that has happened very seldom.
The problem is that by building this plant in Winnipeg, Westaim
thinks it can supply all its needs with this plant that has only
one-third the capacity of the present Westaim plant in Fort
Saskatchewan. The arithmetic just does not add up. The fact is
it is competing.
The other thing that really bothers me is that the minister said
we would not be competing. The documents from the mint itself
said it expects to make $3 million in revenue not from Canadian
sales but from sales to foreign countries buying these blanks.
The concept of not competing is very inconsistently
communicated. I think it is going to happen and it is wrong.
The other thing we need to recognize is that many foreign
countries actually like to deal with governments and it gives
them a tremendously unfair advantage.
1820
Mr. Rob Anders: Mr. Speaker, this type of insidiousness,
this type of evil of shoving out private sector money with public
sector money expands beyond our borders. Not only will it go
ahead and pick up market shares and help to frustrate a private
business in Canada that provides jobs in ridings for some of my
colleagues and fellow Canadians, it will eat into private sector
jobs overseas. It is not just about beating down the private
sector businesses in this country. It is about beating down
private sector businesses around the world.
The parliamentary secretary is shaking her head with glee. The
Liberals have no problem competing with private sector businesses
and beating them about in the marketplace with the very dollars
they pay into the tax coffers of the government in overly
generous surpluses, overpayments in employment insurance, the
Canada pension plan and a host of other programs. The Liberals
are only too happy to take these dollars from private sector
industries and use them against them to cut them out of their
marketplace and market share whether here or abroad. Shame on
them.
Ms. Carolyn Parrish (Parliamentary Secretary to Minister of
Public Works and Government Services, Lib.): Mr. Speaker, the
other member talked about having one or two companies out there
doing a really good job of something and the federal government
should not get involved.
I would like to hear how the member would expect the mint that
produces coins to survive if those companies doing a really good
job of making the raw materials decided to raise the prices,
triple or quadruple what they are now. What controls would we
have over that? It sounded like a fairyland over there.
Mr. Rob Anders: Mr. Speaker, the one thing the Liberals
do not understand is competition. It is called open bidding. If
they are willing to generate $3 million in revenue from foreign
sales, they can just as easily go ahead and purchase through
foreign sales the products they need.
[Translation]
The Acting Speaker (Mr. McClelland): Is the House ready for the
question?
Some hon. members: Question.
The Acting Speaker (Mr. McClelland): Is it the pleasure of the
House to adopt the motion?
Some hon. members: Agreed.
Some hon. members: No.
The Acting Speaker (Mr. McClelland): All those in favour will
please say yea.
Some hon. members: Yea.
The Acting Speaker (Mr. McClelland): All those opposed will
please say nay.
Some hon. members: Nay.
The Acting Speaker (Mr. McClelland): In my opinion the nays have
it.
And more than five members having risen:
The Acting Speaker (Mr. McClelland): Call in the members.
And the bells having rung:
The Acting Speaker (Mr. McClelland): The recorded division on
this motion stands deferred until Tuesday, December 1, 1998, at
the end of government orders.
[English]
SUSPENSION OF SITTING
Mr. Peter Adams: Mr. Speaker, I suggest the House be
suspended until 6.30 p.m.
The Acting Speaker (Mr. McClelland): Is that agreed?
Some hon. members: Agreed.
(The sitting of the House was suspended at 6.24 p.m.)
1830
SITTING RESUMED
The House resumed at 6.30 p.m.
The Speaker: Order, please. Pursuant to order made earlier this
day, the House will now proceed to the consideration of a motion
to adjourn the House for the purpose of discussing a specific and
important matter requiring urgent consideration, namely the
agriculture industry.
EMERGENCY DEBATE
[English]
AGRICULTURE
Mr. Gerald Keddy (South Shore, PC): Mr. Speaker, I move:
The Speaker: Before I call on the hon. member for South
Shore, so that we all know what is transpiring, the length of
speeches is 20 minutes. You may split the speeches in any way
you want. Any speaker may split his or her allotted time. There
will be four hours of debate.
Mr. Gerald Keddy: Mr. Speaker, it is an honour and a
privilege to rise in this House this evening and speak on the
emergency debate on agriculture. Mr. Speaker, I would like to
thank you for granting that debate last Friday.
I would like to split my time with our agriculture critic, the
hon. member for Brandon—Souris.
I am certain everyone in this House is aware that there is an
agriculture crisis in Canada. That crisis is very real and it is
with us today. It has been with us for the last couple of years
in the agriculture community and we expect it will be here
tomorrow. It will take some resolve on the part of this
government. It is going to take some resolve on the part of the
minister of agriculture and some resolve on the part of the
finance minister to find the means to attack this problem.
Several international factors have combined to threaten many
parts of Canada's agriculture industry. The huge support
payments of the European Community and the U.S. government's
support to farmers combined with the Asian financial crisis have
had a devastating effect on the Canadian agriculture community
and the rural way of life across Canada.
In 1997 net farm income fell 55% nationally. In 1998 farm cash
receipts in western Canada are down drastically. There is a
crisis in the hog industry that is affecting every major hog
producing province, provinces like Quebec, Manitoba and Ontario.
To add to this problem, the agriculture industry in Nova Scotia
is reeling from two years of drought that have coincided with
significant cuts to government support programs.
Many in the agriculture industry feel that farm safety nets will
not be strong enough to protect Canadian farmers from further
drops in farm income.
Some statistics are worth repeating. I am sure before the
evening is over, we will repeat this one several times. However,
I will say it one more time because I want to stress the
importance of this. In 1997 net farm income fell 55%. That is
half the net farm income gone. It is impossible. It is a
concept that most of us in small business have a very difficult
time and a very difficult job to grasp. In 1998 farm cash
receipts in western Canada are down again and there are concerns
that the farm safety nets will not hold.
Canada ranked second last in the Organization for Economic
Co-operation and Development for government assistance to
farmers. Canada's producer subsidy equivalent is 2%. The United
States is 16% and the European Union is 49%.
Our farmers do not have to take a back seat to anyone in the
world. They can compete on a fair basis with any farmers
anywhere in the world.
However, when farmers and producers in the United States are
getting a 16% subsidy and farmers and producers in the European
Union are getting a 49% subsidy, it makes it very difficult for
our farmers to compete on an even footing.
1835
It is not sensible for anyone in this House to think the
European Union will drop its subsidies in the short term or that
the United States will drop its subsidies in the short term. The
only sensible train of thought taken from that would be to
support our farmers with the same type of subsidy in the same
type of support the Americans are giving to their farmers and the
same type of support the Europeans are giving to their farmers.
The Asian crisis has had a significant and dramatic effect on
farm incomes. To combat the Asian crisis the United States
recently announced an additional $6 billion in support bringing
its total in excess of $14.5 billion U.S., which is $22.2 billion
Canadian, for 1998 alone.
It goes on and on. Somehow we have to come to grips with the
fact that the farm situation in Canada is in a meltdown.
Thousands of farmers are facing bankruptcy and the NISA accounts
simply do not have enough money to protect them. It is incumbent
upon the Parliament of Canada to find some solution to this
problem.
The Asian crisis has aggravated this problem. At the same time
the European Union has aggressively pushed production over the
last two years, despite falling wheat prices. The European Union
is providing direct support for grain at $175 per acre of wheat
grown. The EU is intervening to support the floor price of grain
with intervention support prices of $205 Canadian per tonne. The
EU export subsidies are $55 Canadian per tonne for wheat, $119
Canadian per tonne for barley and $137 Canadian per tonne for
malt. A European farmer will not receive less than $5.58 per
bushel. Our farmers are receiving somewhere in the range of 40
cents.
We have to recognize this as a major problem and a major affront
to the Canadian economy. We have to come up with some type of
support program to protect our farmers and to help them in
situations like this.
Canada's prime farm safety net, the net income stabilization
account, was developed by a Progressive Conservative government
as a rainy day account whereby farmers in good years could put
away up to 2% of their profits per year, which is not a huge
amount of money, and have that amount matched by the federal and
provincial governments. The income in the account could be drawn
upon during poor years. Farmers have started to withdraw money
from their NISA accounts. For a six-month period in 1998
withdrawals increased by 70%. There is currently $2.5 billion in
the NISA account.
Other safety net measures include crop insurance and companion
programs like advanced payments for crops. The federal
government contributes $600 million and the provinces $400
million to the total safety net structure. That is not enough.
It is inadequate.
Since 1993 federal and provincial government farm support has
decreased by more than 60%. Farmers are looking for a long term
commitment from the federal government for support in good times
and bad. Economists have estimated that Canadian wheat farmers
are receiving less than 40 cents a bushel in direct support from
the Canadian government. How can we compete against countries
that give $2.60 and countries that give up to $5.69? It cannot
happen.
I would like to draw upon a few facts which will be on record
for the House and for members of the other parties who I hope
will be supporting the debate tonight.
The Progressive Conservative Party has had a very positive
record for assisting Canadian agriculture during hard times.
Between 1984-85 and 1988-89 crop and income insurance totalled
$21.7 billion.
We established a special Canadian grains program to offset the
effects of low grain prices caused by the trade war between the
European Union and the U.S. and $2 billion was paid out over two
years. Between 1988 and 1993 $800 million was paid to Canadian
farmers to offset losses from drought through the Canadian
drought assistance program.
1840
The PC party has stated that the federal surplus should be
utilized in the following manner: one-third for debt reduction;
one-third for tax relief; and one-third for government spending.
The current farm income crisis makes it necessary to increase
spending in this area.
Farmers need a long term commitment on farm safety nets.
Currently the minister of agriculture is only negotiating a
one-year extension with his provincial counterparts. Farmers
need assurance of the government's ongoing commitment to a
national farm safety net program. Farmers need a national
program that is consistent from east to west and which is
available to all producers. The assistance programs must be
delivered equitably and fairly.
In the short time I have left, I would like to make a plea to
the members of the Reform Party that they support this emergency
debate and that they understand the crisis. Many of the members
are from western Canada. They also understand that in the past
we spoke as a party with a strong united voice for the producers
of western Canada.
Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Speaker, I
too would like to thank the Speaker of the House of Commons for
allowing this emergency debate to take place this evening. I
would like to thank my colleague from South Shore for putting
forward the motion in my absence.
My colleagues recognize and I am sure the minister of
agriculture and members of the government recognize that I spent
last week talking and more importantly listening to producers
across western Canada. Quite frankly, I have heard too many
tales of horror over the last week to recount to this House but
suffice to say, this issue is a crisis. It is an emergency. An
emergency debate is very necessary in order to put the issue on
the table.
On November 4 when the minister of agriculture met with the
provincial ministers and agriculture leaders to discuss farm
income support, he said that it was a discussion meeting, not a
decision meeting. This past Thursday the minister was also
supposed to meet with the cabinet's social and economic committee
to finalize his proposal to combat the farm income crisis. Still
there is no proposal. As of Friday the minister still did not
have an agreement in principle on the apparent $2 billion bailout
package as reported by CBC last Wednesday.
This week the minister is supposed to meet with cabinet yet
again to try to convince his colleagues why they should support
agriculture. Yet another meeting in the growing list of excuses
is being used to put off making a decision on the farm income
crisis. The government was even trying to make last minute
attempts to put off tonight's debate. Yet another excuse for the
government to put off serious discussions and deliberations.
The minister had an opportunity to show leadership on July 16
this year when he met with his provincial and territorial
counterparts in Niagara-on-the-Lake to discuss the agricultural
safety net program but refused to offer anything more than was
under the current system.
Aside from that particular meeting this past summer, the
minister has been aware of this issue since he was appointed by
the Prime Minister to lead his department last year. This is an
issue that should not be new to the minister or to anyone else in
this House.
The minister has had access to departmental information on the
farm income situation for over a year. The minister has
resources, yet the Government of Canada chose and chooses to do
nothing.
1845
It appears to be the policy of the Liberal government to wait
until things are in crisis before it attempts to fix the problem,
like it did with the helicopter contracts, the department of
fisheries and the Canada pension plan, to name a few.
We would not be in this situation if the political will were
there. It would appear it is not. As was mentioned earlier, do
our competitors have political will?
It took the Americans a very short period of time to put another
$6 billion into the pockets of their producers. The U.K.
recently announced a $250 million program. I quote the minister
of agriculture for Great Britain, Mr. Brown:
“I know the industry has been going through a bad patch but I am
confident it has a prosperous future. To get there it needs our
support now and that is what I am providing”.
This was from the minister of agriculture in the U.K., our
competitor in the world marketplace and certainly one which has
the political will to put its money where it has to be spent, to
the producers.
As we witnessed in October, our neighbours to the south
announced a $6 billion package which, on top of the $8.25 billion
package in the U.S. federal agriculture income reform act, makes
$14 billion into American farmer pockets.
I will be perfectly clear. I am not, nor is the Progressive
Conservative Party, suggesting that we match the United States in
income support. It would be futile. We cannot compete with the
U.S. or the European Union on the same cash level. It would also
be futile to think Canada can convince the U.S. or the EU over
the next week to reduce their producer support to Canadian
levels. They simply would not. But something has to be done.
That is why a short term immediate cash injection is needed to
prevent future destruction to the fundamentals of this Canadian
industry. With the short term cash injection for this year we
must also develop long term solutions. We must try to protect
our industry with a two pronged approach, the short term cash
injection for this year combined with a long term whole farm
program that will not be countervailable by the U.S. in the next
round of trade talks.
If we only provide a short term approach we will only have long
term problems for our agricultural industry.
I would be remiss if I did not point out that I find it quite
ironic that the agriculture minister repeatedly said that he
would never resort to an ad hoc program yet that is exactly what
we are dealing with right now in cabinet. I do not, nor does any
member of the PC party, believe that ad hoc programs are what
producers need but unfortunately the government has given the
industry no other options after gutting the safety net program.
We would not be in this position if the government had the
foresight to replace a long term program when it eliminated the
GRIP in 1995.
In 1995 the government decided to take short term gain for long
term pain. Other provinces did not. Alberta has a FIDIP
program, a revenue program, and Ontario has a market revenue
insurance program which is similar to GRIP in style but was
massaged so it dealt with any countervail problems.
When commodity prices were doing well and everything seemed
great on the farm, why would people think they should put
emphasis on farm safety programs? The problem with that kind of
thinking is that more often than not good times do not last
forever. Now we are in that situation. If we had strong federal
leadership for the industry we would not be in this situation.
Progressive Conservative provincial governments are making
efforts to bridge the gap in the current safety net crisis. On
Friday the Alberta government pledged to increase interest free
loans for producers to $50,000 from $15,000 for hog producers.
Manitoba has offered share in support of a national program, and
hot off the press, in Manitoba the agriculture minister, Mr.
Harry Enns, has just indicated that he has asked the Manitoba
Agricultural Credit Corporation to work with producers on case by
case basis where appropriate to defer scheduled payments so that
they can keep agriculture on the farm. P.E.I. also recently
announced income support for its hog industry.
The time for meetings is over. The time for action is now.
Producers are selling at a loss. According to StatsCan net farm
incomes dropped 55% nationally between 1996 and 1997.
1850
It was projected to drop another 35% in 1997-98. Next year it
is only expected to be worse. This industry is expected to lose
$170 million next year, the first negative income figure since
the Great Depression.
Farmers cannot wait. They need our support and they need it
now. We know there is a problem, now let us get on with it.
I remind the minister of agriculture of his own words on
February 9, 1993 in this House: “I want to address this to the
taxpayers who wonder why governments spend billions of dollars on
agriculture. The taxpayer, like all of us in these recessionary
times, finds it difficult to rationalize big expenses. Why do we
continue to support agriculture? The answer is because it is
worth our support. The cost for farm support is not cheap but
Canadians should ask themselves where they want their food to
come from. I believe they want it to come from Canada”. I
agree with those comments. Let us do something.
I would like to be of assistance in this debate. I would like
to make sure the minister of agriculture knows he has our support
in the Progressive Conservative Party. I implore him to go to
his cabinet colleagues to make sure this program is put into
place before the end of the year, sooner than later, so my
producers can come back to the land in the spring.
Hon. Lyle Vanclief (Minister of Agriculture and Agri-Food,
Lib.): Mr. Speaker, I will split my time with my
parliamentary secretary.
There is no question we are all aware and many more
Canadians are aware this week and in the last number of days of
the tremendous anxiety in the farm community in Canada today,
particularly among those farmers who are involved in the hog and
grain sectors.
I have spent my lifetime in the agriculture and agri-food
industry. I know the situation that too many Canadian farmers
are in today. I can tell the House in all sincerity that I have
never worked harder on any issue than I have on this and will
continue to do so. I appreciate the support of my colleagues in
cabinet, my counterparts in the provinces, farmers themselves,
the farm organizations, my colleagues on this side of the House
and all members on this issue.
We need to come up with a program, some support and the most
effective solution that we can to meet the needs of the
agricultural community and the country as a whole.
I also thank all my colleagues in the House for continuing to
bring this issue to the attention of all Canadians. Agriculture
producers are hardworking people. They represent one of the
pillars of our economy.
However, at times I think many Canadians who live in urban areas
forget just how important the agricultural industry is. I thank
the previous speaker for reading again into the House some
comments I made along that line some years ago.
A motion like this can be very helpful in informing the public
about the serious situation our farmers presently face. I am
certainly well aware of the struggle of some producers and how
serious that struggle is right now. I have certainly met with a
lot of farmers, as I said, farm organizations, provincial
colleagues and I could go on. I have been talking with them
across the country from coast to coast a great deal over the last
number of days and weeks.
I know how desperate too many producers are. They fear for
their future and for their ability to provide for their families.
Beyond my concern about their personal circumstances, I am also
very concerned about what this current situation will do to an
industry that has been very robust, one that has taken calculated
risks and has made a significant contribution to the economic
growth of Canada in the past several years.
1855
Let us not forget this industry is responsible for more than 8%
of the gross domestic product. It has made a tremendous
contribution to the restoration of the country's public finances.
Our farmers have been very willing to take risks. We have all
been the better for that. They jumped into the export markets
feet first. That helped to fuel the growth of our national
economy.
It concerns me that if producers feel they cannot count on us in
their time need they will be less willing to take those risks in
the future. Let me assure members that would have a negative
impact on all of us. The federal and provincial governments have
provided tools to help farmers manage the risks they have taken.
We want those tools to be used.
At the same time I know in talking to farmers and provincial
governments that these existing tools will not be enough to meet
the needs of certain producers especially in the difficult times
and circumstances right now. I am very concerned that we offer
the necessary support to those producers over the short term so
that efficient and productive farmers are not sacrificed because
of global market conditions that are no fault of their own.
I know there are a number of members opposite who are pounding
away on the need to do something immediately. I can tell members
we are working as quickly as possible to do that. As everyone is
aware, I have discussed this very thoroughly with my colleagues
in cabinet. They understand the severity of the situation and
are currently helping me to determine how best to act.
We have taken action to make sure farmers are able to use the
tools already in place while we are mapping out the best course
of action ahead. We put in place a process for interim
withdrawal provisions so producers could call on their NISA
accounts before the end of the tax year. We took measures to
make sure producers are well aware of the advance payments for
crops program to help deal with their cashflow issue at the
present time.
Meanwhile I met with farm organizations and provincial
representatives. We agreed to work together to look at short
term options and accelerate the longer term review being carried
out by the safety net advisory committee. Since then I have
received the report of that committee. I have raised it with
members of cabinet. We are continuing to put together the
information we need to come up with a program that is effective
and equitable and that does not undermine the investments we have
already made.
I have also talked to input suppliers such as the Canadian
Fertilizer Institute which I met with a little over a week ago.
Last Friday I met with the Royal Bank. I will be meeting with
other financial institutions to make sure they understand the
situation our farmers are facing. I am taking every opportunity
to encourage everyone who deals with farmers to act with
compassion and to work with producers to manage the payment
schedules in the best way possible during these tough times.
Tomorrow I plan to speak to representatives of the U.S.
agricultural industry in Washington to try to convince them of
the need to call a halt to the subsidy war that is again revving
up. It is clear to me and I know to members on the opposite side
that getting into another bidding war with the Europeans and the
Americans like the one we had in the 1980s will only hurt
everyone.
That is why even in the midst of the current income problems we
need to continue working to formulate a strong position to go
into the next round of the world trade negotiations. In the
meantime I will be seeking the collaboration of provinces, the
sector and my cabinet colleagues. With the support of the members
opposite, I am putting all my energy into coming up with viable
actions to help alleviate the burden on Canadian producers.
My caucus colleagues are sparing no efforts pointing out to me
the necessity of addressing this issue. This government wants to
do the best we can for our farmers. We are also aware of the
need to best what we can do best for all Canadians. Supporting
an industry as significant as agriculture is what is good for
Canadians. There is absolutely no doubt in my mind. It is now a
matter to determine what we can afford to do and how we can shape
our assistance to make sure it helps those most in need. There is
also a need to talk to the provincial ministers to work out some
of the details.
I am counting on the provinces to do their part. The bottom line
is that the Canadian agriculture industry deserves the support of
all of us in these difficult times.
1900
I consider it an honour to represent Canadian farmers and I take
that responsibility very seriously. I can pledge to this House
and to the farmers across this country that I will do everything
in my power to make sure farmers get the support they need.
Mr. Joe McGuire (Parliamentary Secretary to Minister of
Agriculture and Agri-Food, Lib.): Mr. Speaker, it is a
pleasure for me to take part in this debate tonight.
I think before we go any further we should put on the record
what the fifth party and the official opposition said just a few
short months ago about the future they saw for agriculture in
this country. I am going to quote directly from the platform of
the Progressive Conservative Party, the fifth party.
I quote directly from the platform. It states “In cases such
as agriculture and transportation—”
Some hon. members: Oh, oh.
The Deputy Speaker: Order, please. It is very difficult
for the Chair to hear the hon. member. Obviously his remarks
have provoked something of an uproar, but I am unable to tell. I
would appreciate it if we could have a little order so that the
Chair is able to hear the debate. The Chair is very interested
in this debate too.
Mr. Joe McGuire: Mr. Speaker, I think I have touched a
very sore spot. I am quoting from their very own platform of
1997. I want to put on the record just what is in that platform.
It states:
In cases such as agriculture and transportation, there is
significant overlap between the provinces and the federal
governments, with substantial duplication of services as a
result. In the case of the environment, there are four federal
departments responsible for elements of our environment. By
merging the Departments of Agriculture and Agri-Food,
Environment, Natural Resources and Fisheries and Oceans into a
Department of Sustainable Development, we can ensure proper
priority is placed on the inter-generational responsibilities we
all bear for the preservation of our environment, while at the
same time finding the savings we need to meet our other main
objectives.
In that regard they were going to cut the department of
agriculture, which was going to be a savings of $608 million.
They go on to say:
We intend to reform this Department with a view to aligning its
objectives more closely with those of the large and well-funded
provincial ministries of agriculture.
I am not sure what the provincial ministers are saying about
this today.
They go on to say:
Consistent with the trend in recent multilateral trade
negotiations, we will be moving to reduce and eventually
eliminate farm subsidy programs.
They were going to eliminate them all.
They continue:
Consistent with our commitment to freer markets, we will also
accelerate the five year phase out in dairy subsidies.
The relationship between this Department and the private sector
will also be changed. For example, we will broaden the scope for
the transfer of research and development activities to the
private sector. In exchange, we will be looking to increase
cost-recovery for food inspection and regulatory oversight.
I know this is very difficult for them to accept after the
initial speech in which they were asking the government to come
out with both long term and short term subsidies to help farmers,
which we are taking very seriously.
I will summarize what they would have done if they were sitting
on this side of the House. Number one, the Department of
Agriculture and Agri-Food would have disappeared. The budget
would have been cut by $608 million or 40%.
1905
Research and development activities would have been transferred
to the private sector. Cost recovery for food inspection and
regulatory oversight would have been increased. The dairy
subsidy would have been phased out in three years, not five,
without any compensation to dairy farmers, and farm subsidy
programs would have been reduced and eliminated.
This platform is very similar to the Reform platform. They were
going to put agriculture under a department for sustainable
development. They did not foresee in the foreseeable future that
farming might take a tumble.
Our government and our minister are working toward both a long
term and a short term solution to the problems farmers are
experiencing today.
The system, as a whole, is a good system. However, the minister
has also clearly said that he recognizes the current downturn
might prove too deep and too difficult for some producers to
manage using what is currently in place.
Some farmers may not have enough in their NISA accounts to see
them through 1999. That may be because they are new to the
business or because they have had a couple of bad years due to
circumstances outside their control. For whatever reason, they
have not been able to save enough in their NISA accounts. We
want to be able to assist those farmers.
We also want to design a program that will not undermine the
system we have. In other words, we want to make sure that we
design something which encourages farmers to use NISA in the way
it was intended, but also provide a system to those most in need.
The National Safety Net Advisory Committee has examined disaster
programs that are in place in British Columbia, Alberta and
Prince Edward Island. It has recommended that a program based on
the design of these programs, but with some modifications, be
implemented at the national level.
The committee wants the program to be income-based and generally
available to ensure it meets our trade obligations and cannot be
successfully challenged. Such a whole farm approach is essential
for this program to be effective and to succeed. I say that
because some hon. members may either be nostalgic for the days of
huge Tory-style payouts or may be confusing the committee's
recommendations with such an approach.
The program viewed by the safety net committee would be a
so-called green program, one that treats all farms fairly and
does not discriminate against any commodity. That will be
welcome news to farmers across the country.
The Minister of Agriculture and Agri-Food has said that he and
his provincial counterparts are looking at this design very
carefully. Such a proposal is in line with the results of a
meeting held with the Minister of Agriculture and Agri-Food and
his provincial counterparts in Niagara-on-the-Lake in July of
this year.
I began my speech by asking where the solutions to the farm
income situation were going to come from. They are not going to
come from the PC platform or the Reform Party platform.
NISA and its companion funds provide a partial answer. I am
confident that the ongoing work of the Minister of Agriculture
and Agri-Food and the cabinet, in partnership with farmers and
provincial governments, will give us the other parts.
Mr. Preston Manning (Leader of the Opposition, Ref.): Mr.
Speaker, I rise to participate in this emergency debate on the
income crisis in agriculture, which is of concern not only to our
farm people, but to all of us in this House.
I will be splitting my time with the official opposition
agriculture critic, the member for Selkirk—Interlake.
Surely the issue here is not whether there is an income crisis
in agriculture. This fact was clearly established during the
supply day debate on November 3 in this House when the official
opposition urged the government to move immediately to defend the
interests of Canadian farmers from unfair subsidies and unfair
treatment by foreign countries which have changed the problem of
stagnant farm incomes to a full blown farm income crisis.
Tonight, therefore, I would like to focus on two questions.
First, why is it taking the government so long to act? Second,
will the government provide a real solution or simply a band-aid?
Over a year ago Statistics Canada and Agriculture Canada
predicted that realized net farm income would fall by 46%
Canada-wide. The government did not react at that time to that
prediction in a substantive way. Earlier this year Agriculture
Canada predicted another 30% drop in net farm income, but there
was still no substantive long range or short range reaction from
the government.
May I suggest that this has become part of a pattern with this
government. It is slow to act, period.
1910
For example, for years it was known that the cod fish stocks off
the Atlantic coast and now the salmon fish stocks off the west
coast have been declining in absolute terms. The government
expresses alarm. The government does studies. The government
wrings its hands. But the government never acts until there is a
full blown crisis and even then it usually acts with band-aids.
The House, therefore, calls upon the government to act with
speed on the agriculture income crisis, but also asks why the
government always has to wait until an emergency is upon it to do
something substantive.
The question is, will the government provide band-aids or real
long term solutions? The government may talk about emergency aid
of $450 million this year and another $450 million next year, as
has been rumoured in the press. The government may put forward a
non-contributory, non-commodity specific plan which would make up
part of the shortfall if farmers' gross margins fall below some
percentage of a five year average, as has been suggested;
essentially a revenue insurance program without the premiums. But
our concern is that Canadian agriculture needs more than band-aid
solutions. It needs real, long term solutions.
As the official opposition repeatedly pointed out in debate on
the supply day motion earlier this month, these long term
solutions involve two elements. First, a more aggressive
strategy to reduce, through political pressure and international
trade negotiations, the subsidies paid to American and European
farmers. This country has done its part to lower agricultural
subsidies and it expects and should insist that its trading
partners do likewise.
We suggest a two-stage strategy: a special effort to resolve
our trade differences with the Americans first through NAFTA and
then a co-operative joint effort on behalf of Canada and the
United States to attack European subsidies, which are really at
the root of this problem.
Second, and this is the main point I want to make—it is the
reason I am in this debate—what the agricultural sector needs is
what every Canadian needs, what every family needs, what every
sector needs, particularly those sectors experiencing reduced
incomes, and that is broad based, substantive tax relief.
What has been the fiscal policy of Liberal and Tory governments
in this country for over 30 years? If it moves, tax it. If it
continues to move, tax it more. And if it stops moving,
subsidize it.
I have in my hand a table from Statistics Canada titled “Income
Tax Paid by Canadian Farmers 1993-96”. It shows a total paid
over those four years of $4.2 billion, about $1 billion per year,
$2.75 billion of which went to the federal government.
I would like to see this done by the agriculture department. It
should be part of its presentation to finance and cabinet. There
should be a calculation of all the taxes paid by individuals,
families and companies in the agriculture sector on inputs from
sales taxes on consumer goods and equipment to taxes on fuel and
fertilizer. For example, we know that in 1997 alone Canadian
farmers spent $2.037 billion on fertilizer. Of that total, 15%
was taxed. That is $306 million in taxes on one input item, in
one year alone, that the government took from farmers.
My point is that this government plays a shell game with taxes
and subsidies. It takes with one hand and it gives with the
other. But the taking is always greater than the giving.
If the government had followed the advice of the official
opposition and farmers across this country and substantially
reduced taxes on this sector over the last five years, I would
suggest that the balances in the net income stabilization
accounts would have been much higher, the savings of farmers
would have been much higher and farmers would have been in a much
better position to withstand the downturn in commodity prices
than they are today.
1915
What is the position of the official opposition on the emergency
aid package which the government intends to bring forward? It is
hard to say because nothing was brought forward tonight. We want
to study the details when they are brought forward and cost them
out.
Basically our position is this: if the finance minister will
clearly declare that the forthcoming budget will contain broad
based tax relief for all Canadians, including the agricultural
sector, then the official opposition would be prepared to support
a temporary aid package as part of that long term solution. We
would also insist that temporary aid be presented as compensation
for demonstrable injury done to our producers by foreign
subsidies so that it is seen as an anti-subsidy measure.
On the other hand, if all the government has to offer is a
band-aid without offering these long term solutions, we will
declare that band-aid insufficient and continue to fight for the
long term solutions upon which the future prosperity of Canadian
agriculture truly rests.
Mr. Howard Hilstrom (Selkirk—Interlake, Ref.): Mr.
Speaker, I certainly will participate in the debate tonight. This
issue is of utmost importance to many people in my riding and
across the country.
The debate tonight has already been held in the House in that
Reform had a supply day motion where the whole farm income issue
was debated. In essence we are going over again the very thing
that Reform initiated a couple of weeks ago.
At the agriculture committee once again a Reform motion required
the committee to hold hearings and come up with a report along
with recommendations to the minister. That will be delivered on
December 7 for the benefit of the agriculture minister.
While the debate is important in that we want to talk about it
as much as possible and get all the facts out, the fact is that
the Conservatives under their new leader, Mr. Joe Clark, are once
again three steps behind the issue.
As noted by the hon. member for Calgary Southwest, the current
Liberal government knew at least a year ago that this crisis was
on our doorstep. It continued to ignore farmers until pictures
of dead pigs and bankrupt farmers on the nightly news forced it
to think of something. Without the Reform Party's action in
committee and in the House of Commons, I wonder if this issue
would be as far down the road as it is today. This crisis is
real. It is national in scope and will not be over soon. This
fallen income was forecast by Statistics Canada and Agriculture
Canada some time ago.
Why did the Liberals fail to take action? The question has been
asked before but it must be asked again. If a drop in income
this severe was forecast for any other major industry such as the
auto sector, would the government have failed to act or not
reacted as it could have?
Our producers must have more than just a temporary band-aid.
They need a long term solution. In arriving at this solution the
Minister of Agriculture and Agri-Food and the Minister
responsible for the Canadian Wheat Board did not attend the
Saskatchewan Wheat Pool meetings two weeks ago. There were
farmers there, primarily producers who had stories to tell about
the income crisis facing Saskatchewan. After the tough questions
at the United Grain Growers annual meeting I suppose the minister
was a bit hesitant to attend another farmer rally. However I
believe that the junior minister for agriculture from the
government did attend.
How can the government claim to understand the problem or
develop real solutions to the problems if it does not even take
the time to listen to producers in addition to industry
representatives? How can the government claim to care about
farmers when even rural ministers cannot drag themselves out of
Ottawa?
I would like to talk about a farm rally that happened in
Neilburg, Saskatchewan. All politicians and all the general
public were invited to attend the rally to talk about the income
crisis. There were no federal Liberals there. There were no
federal NDP there. There were no federal Conservatives at this
open public meeting.
1920
Over 500 concerned producers organized a meeting and invited
everyone. They were not only talking about income but a serious
drought that hit a larger portion of Alberta and Saskatchewan.
These are real people who are facing the destruction of their
livelihoods. The minister of agriculture from Saskatchewan took
time to attend. Once again federal representation, with the
exception of two members of the Reform Party, was totally
missing.
Reform attended both the Saskatchewan Wheat Pool meetings and
the Neilburg rally in order to get direct input from the farmers
concerned. It is because Reform has been listening to farmers
that we have been pressuring the government to take action since
the opening of parliament.
Unfortunately the government has not been listening, which is
why we are in the middle of an emergency debate. Why did the
Liberals delay the hearings of the agriculture committee by a
month? Why has the government done little to implement Reform's
November 3 supply day motion.
Farmers need more than handouts. At these meetings farmers told
me over and over again that they needed help today. They cannot
keep coming back to the government every few years. Government
must create the conditions that will allow them to survive and
prosper without a federal cheque.
On this list are also marketing problems that are endemic across
western Canada in the way we market wheat and barley. Many grain
companies and farmers have innovative ideas about how to market
grains and are restricted from doing so because of the Canadian
Wheat Board. It is a sad to read the papers every day of farmers
being fined tens of thousands of dollars in lots of cases and
some even going to jail for marketing their own grain.
This feedback has been the basis of Reform's plan to get us out
of the emergency we are in. However, it must be part of a larger
package. The broader package must address two key root causes of
the current farm income crisis: international causes and
domestic causes.
International action is required. We must have free and fair
trade abroad. This means our government must take strong action
to reduce foreign subsidies. For example, the European Union
subsidies on wheat production are 773% above Canadian subsidies
while the U.S. wheat subsidies are 480% above Canadian subsidies.
Our farmers cannot wait until the end of the next WTO talks to
have these subsidies fall.
We see who is going to Europe to talk about these subsidies. A
large number of senators are going over to Europe at a cost
$107,750. These unelected people will come back and have very
little, if anything, to say. They certainly will not have any
impact on Europeans. The agriculture minister and trade minister
should be going there. At least they are elected. If their
actions do nothing to help farmers, they can be thrown out in the
next election.
Many people have suggested that we enter bilateral negotiations
with the U.S. to develop North American opposition to the high EU
subsidies. Unfortunately the Liberals have made no attempt to
initiate these types of negotiations. Our government must ensure
that our trading partners live up to agreements that have already
been signed. The European Union is still stopping our beef and
our canola exports into those countries. Trade tribunals have
ruled against the Europeans in this regard but they continue to
take that action and our government seems unable to do anything
about it.
On September 16 the governor of South Dakota began stopping
Canadian agriculture exports. South Dakota had given the trade
minister a two week warning and yet the border remained closed
until the first week of October. The government claimed that
this dispute was due to election hype, but this was not true
because we see the trade disputes continuing. North Dakota
farmers have indicated that they will once again blockade the
border on December 6. Where is the action to make sure that this
does not happen?
Farmers who are facing some of the lowest commodity prices in
recent years cannot afford to have their income problems
compounded by an incompetent trade minister.
1925
I will talk for a few minutes about the domestic action that is
required. A short term disaster assistance plan has to be
related to actual harm created by the trade subsidies of other
countries. Farmers not only need lower subsidies abroad. They
must have lower taxes at home.
The hon. member for Calgary Southwest outlined three specific
areas in which the government could reduce its burden on
producers. These were to suspend the user fees of the Department
of Agriculture of $138 million per year, suspend federal 4 cent
per litre excise tax on farm fuel, and suspend taxes on farm
input such as fertilizer. Federal taxes account for about 15% of
the retail cost of fertilizers.
By suspending its tax grab in these areas it would give farmers
about $500 million. The rumours of how much aid will be put
forward by the federal government are right in that
neighbourhood. We would not have this problem if only tax reform
was put forward by the government. The government is
contemplating giving farmers emergency aid while at the same time
taking more than $500 million directly out of their pockets. This
does not seem to make sense to a reasonable person.
Reform's plan could be implemented today. Other proposals will
take time to implement and some of our producers will be lost in
the wait. Unlike ad hoc payments, Reform's plan for targeted
reduction on the cost of government will have lasting effects on
the viability of agriculture. Our plan will allow producers to
compete in the global agriculture environment without
interference from the federal government.
Reform's plan to reduce the cost of government will not only
immediately benefit agricultural producers. It will also
immediately benefit the industries that support our producers.
Our plan will have an immediate benefit to the economy of the
entire Canadian agriculture and agrifood sector.
Above all, I absolutely insist and demand that the government
not institute any program which the Americans will feel has to be
countervailed due to interpretations of the World Trade
Organization rules and NAFTA. If the government takes that kind
of action the hurt in the agriculture area, particularly in the
area of hogs and cattle, will be at least 1,000 times more than
what it is today.
In encouraging the government to look at this crisis I also
caution it not to do anything that will destroy what is left of
the economy in western Canada.
[Translation]
Ms. Hélène Alarie (Louis-Hébert, BQ): Mr. Speaker, I feel a great
deal of responsibility and emotion in rising to speak in this
emergency debate on the income crisis in agriculture.
This crisis resembles the one in the early 1980s, when the
government was providing three times as much income security as
it does currently. At that time, the figure was $3.5 billion,
while now it is only $727 million. Something needs to be done
urgently, therefore.
There is urgency because farm incomes have dropped 20% to 40%,
and for certain types of operation, up to 70%.
There is urgency because, to give one example, the sales price
of pork is half what it costs to produce it. So what is there
left for the producers?
In November 1997, hogs were selling at $168 per hundredweight,
while last Friday it was $67 per hundredweight. Grain prices
are going the same way.
We are therefore calling for an emergency plan to assist
farmers, who have seen their average price go down by 70% this
year.
Over and above the market price, there are the rules of
international trade to consider, as well as the support the
European Union has given to export subsidies, not to mention
direct support given to farmers. The U.S.A. has made a direct
injection of $6 billion to producers. This breaks down into
$2.6 billion in disaster relief and the rest is connected to low
market prices. And that is not the end of it.
1930
At a meeting in Montreal as part of the upcoming WTO
negotiations, both the Americans and the Europeans expressed a
desire to continue supporting their farmers. We must act now
with all urgency and fairness for the 1998 production and in the
future, depending on the state of the crisis.
What are the effects of this crisis? There are direct effects
and there are secondary effects. The direct effects are the
abandonment of farms, the agricultural crisis, which very often
leads to a family crisis, the move of people from the country to
the city and human tragedy on the scale of the suffering
experienced on the farm.
Farm producers see a long way ahead. They have a sense of
continuity.
Theirs is a vocation, a way of life. Agricultural products are
not like preserves, set aside until the prices rise.
Then there are the adverse effects. The two most important ones
are the direct attack on rural life and the loss of expertise.
The attack on rural life is straightforward. When the
countryside is emptied, the community loses its structure. As
to the loss of expertise, there are actual cases where people
realize that destructuring the agricultural community leads to a
loss of knowledge that it took years to acquire and that is hard
to replace.
We heard an example of adverse effect last week, when the
representatives of the Canadian canola association appeared
before the agriculture committee and stated that a number of
farmers wanted to produce canola because prices were good.
What are the disadvantages? First, there is a drop in
productivity, because some producers will not be familiar with
this method—this is to be expected from those just starting
out—because this does not work everywhere, and rotation may be
less successful if not done properly.
A second disadvantage is that, if supply increases, prices go
down. So what was a good crop becomes an average crop because
the market is flooded. There is also an increase in disease
because of greater crop concentration. Nobody is a winner.
The solution is several hundreds of millions of dollars in
direct assistance based on farmers' needs. This is what we are
calling “operation bail-out”. There are other things that can be
done, however.
Speaking of other things, I think of the Canadian Pork Council's
food bank idea. This does not get a lot of attention, but it
should, because there are food shortages, for instance in
Central America after Hurricane Mitch, in Russia, with an
economic crisis threatening to spill over into adjoining
countries, and in North Korea, which is in the throes of a
famine. But all these countries, whatever their religion and
customs, eat pork.
What led up to the crisis we are now experiencing? It came
about not because of overproduction, but because of a lack of
money among some of our clients, notably Asia and Russia. We
must therefore not panic and cut back on production, or we will
no longer be competitive.
Why stockpile when part of the world does not have enough to
eat? Canada should get going and create a food bank.
The United States took this step this year, contributing 50,000
tonnes of pork, and we could follow suit, with 10,000 tonnes of
pork.
This is therefore not a chronic supply and demand problem
because, if our clients had the money, demand would still be
going up.
Finally, I would like to speak about Quebec's problem, which is
different from that of the other provinces. The Quebec pork
industry generates close to $4 billion in economic spinoffs
annually and creates some 30,000 direct and indirect jobs,
particularly in the regions. All hogs sold are slaughtered, and
therefore undergo primary processing, in Quebec, rather than
flooding abattoirs in the United States.
1935
Producers participate in the farm income stabilization insurance
program, which makes up the difference between the cost of
production and market prices. For instance, if the present cost
of production is $140 per 100 kilos and the market price is $67,
the difference between $67 and $140 will be paid by the farm
income stabilization insurance program.
In good years, when the price of pork is $225, obviously nobody
receives any compensation payments from this program. It is a
bank for when times are bad. Obviously, we did not expect times
to be as bad as they are right now.
In this program, one third of the costs are paid by the
producers themselves and the money the federal government puts
into the net income stabilization account in other provinces
goes directly, in our case, into the farm income stabilization
insurance program. This is a major difference with the practice
in other provinces.
The Government of Quebec has just put $30 million into the farm
income stabilization insurance program to shore up the income of
pork producers. It therefore expects to receive its fair share
in the present crisis and to have that share cover the 1998
losses and any other losses as long as the crisis continues.
Quebec's farming sector is now undergoing a crisis of
confidence. We were unfortunate, not to say unlucky, in the
outcome of the scrapie crisis, and feel we did not receive our
fair share of the compensation due us. I also resent some
recent intrusions by the Minister of Agriculture and Agri-Food in
our jurisdiction.
I am thinking of the meeting held here in Ottawa, when a meeting
was being held in Montreal with the same leaders as part of the
WTO negotiations. The same thing is going to happen again this
week during the meeting of the Union des producteurs agricoles,
and tomorrow, for the visit in Washington, the fourth and fifth
parties have been invited, but not the third. This leaves us
bitter, worried and anxious, and this is the place to say so.
The meeting of the Union des producteurs agricoles, which
consists of all representatives of farmers in Quebec, and is
therefore the only organization representing them, has as its
theme next week “Growing the future together”. How can we think
about the future, when our farmers are unable to make a living
in the present?
In conclusion, whatever the federal government's new plan is, it
should take into account the Government of Quebec's initiative,
and the particular nature of Quebec's farm safety net income
program. The Bloc Quebecois will be opposed to the
soon-to-be-announced emergency plan if it penalizes Quebec's
producers, particularly our hog producers, in any way.
Our political party will also be opposed if the federal
government favours one region over another in the kind of
assistance it plans to provide. By this I mean that, by
providing greater assistance for live hog producers than for
producers of processed pork, the federal government would be
favouring Ontario, which exports live hogs, over Quebec, which
exports processed pork.
Whatever the outcome in Quebec today, the Bloc Quebecois will be
very vigilant. A speedy response to this crisis is necessary.
In order to take into account the special character of Quebec
and the fact that the government has already taken specific
action to assist affected hog producers, various solutions could
be considered, one of which might simply be to compensate the
Government of Quebec for the assistance it decides to give hog
producers.
[English]
Ms. Alexa McDonough (Halifax, NDP): Mr. Speaker, I am
very pleased to have the opportunity to participate in the debate
this evening and to share my time with my colleague, the member
for Regina—Lumsden—Lake Centre. He was the first member of the
House to begin calling for an emergency debate on the crisis
faced by our farm families and our farm communities.
1940
Our caucus ever since has been calling for swift action by the
government. It is very regrettable that we do not yet see signs
that the federal Liberal government recognizes the severity of
this crisis nor the urgency that is required to move swiftly to
address the tragedy that is unfolding. Let us be clear that the
magnitude of this crisis is surpassed in this century only by the
Great Depression of the dirty thirties.
We have been trying to get the government to recognize that it
must act before more lives are devastated, before more lifelong
investments are jeopardized and more livelihoods destroyed.
Regrettably farmers and their families are still waiting for that
swift action.
Low international commodity prices for agriculture products,
particularly grain and hogs, and the tailspin in Asian markets
have put the livelihoods of tens of thousands of Canadian farmers
at risk. Nowhere is it clearer than on our farms today that
globalization rules crafted to meet the demands of the mega
corporations to make mega profits will never serve ordinary
hardworking farm families. We must ensure that increased
globalization is accompanied by increased safeguards at the
international level.
However, proposals to rein in speculators in money and
commodities and to bring humanity to international economies
cannot be put in place overnight. A Tobin tax on international
speculation will not help our farmers today. Promises of more
rational international economic management will not provide
relief tomorrow. As I said in the House last week, we cannot feed
pigs with promises and we cannot grow grain in such uncertain
ground.
Canadian farmers face a crisis now. It is not good enough for
Liberals to do as little as possible as late as possible. Nor is
it helpful for the Reform Party in its usual Pavlovian fashion to
pretend that lower taxes offer a solution to this crisis because
they do not. And to howl long and loud about international
subsidies will not solve the crisis either.
These farm families need urgent assistance and they need it now.
They need quick and decisive action. Neither the government nor
the official opposition seems to understand that. Or if they do,
they apparently are not willing to respond with the urgent
measures that are so desperately needed.
Make no mistake. This is a crisis. In 1998 farm income in
Saskatchewan will decline by nearly one-half a billion dollars.
That is over a 70% decline in income. In Manitoba it will
decline by more than a quarter of a billion dollars, $300
million. In Prince Edward Island incomes will be 33% lower than
the 1993-97 average.
Since 1995 wheat prices at the farm gate have dropped 40%. Hog
prices have dropped 60% from 1997 levels. In my home province of
Nova Scotia almost $50 million will be required to make up for
lost revenues. The lost farm income in Manitoba and Saskatchewan
alone is equal to all of the losses in this January's ice storm.
What is the cost of waiting? What is the cost of the Liberal
approach of waiting until the last minute to pay as little as
possible to our farm families in distress?
First, it means fewer family farms and more agribusiness. If
trends continue, there will be 7,500 fewer farms in Manitoba in
less than 10 years. Fewer family farms spells disaster for the
small businesses that depend on the strong local farm economy.
And fewer farm families means greater strains on our rural
infrastructure, more school and hospital closures, reduced
services and destruction of a way of life.
Second, the Liberal delay means that thousands of farms that can
be viable if they are helped to weather this storm will not be
around when the snow melts. They will not be able to afford the
seed, the feed or the fertilizers they need to survive into next
year.
Inside and outside this House the member for Palliser and other
NDP members have been warning the minister since last March of
the mounting farm crisis. In October, New Democrats proposed an
emergency program to match recently announced U.S. assistance.
In response to our questions, the minister simply boasted that
Americans envy our farm support programs and that his government
was studying the problem.
1945
The Americans did more than study. They acted at the first sign
of trouble. Meanwhile our agriculture minister has not yet
convinced his colleagues of the urgency of the crisis. It is
shameful and a national disgrace that a government that boasts a
$10.5 billion surplus has neither the humanity nor the competence
to address this crisis.
Since the United States implemented its program of relief, what
have we had from this federal Liberal government? Sixty more
days of inaction. Sixty more days of bankruptcy. Sixty more
days of foreclosures. Sixty more days of stress and crippling
uncertainty for our farm families.
In Saskatchewan alone requests for farm debt mediation and
consultation services have increased 76%. Meanwhile Reformers
advocate tax cuts for fertilizer and farm implements as the
remedy. Talk about an eyedropper in an ocean. A few hundred
dollars in tax relief from reduced sales taxes is not going to
make up for the $60 lost in each and every hog produced or
compensate for more than a 70% reduction in farm income.
Reform talks about unfair subsidies. Our farmers are in this
crisis partly because the Liberal government blindly and
foolishly followed Reform proposals to cut $600 million in farm
support. In fact, the Liberals driven by Reform mean-spiritedness
cut nearly $2 billion in support. They went further than the
Reform Party advocated in the way of cuts, which is why we are in
this mess today.
While Europeans and Americans were carefully and steadily
reducing subsidies in line with the WTO guidelines by 25% over
five years, Canada chose to reduce subsidies by over 60% for
crops. Cancelling the Crow benefit alone meant an annual loss of
$700 million to prairie farmers.
Reform's leader said he was not convinced of the need for an
emergency income program. He should open his eyes and unplug his
ears. Listen to farmers across this country who see their
livelihood threatened by an international crisis not of their own
making and a government that has slashed agricultural support far
beyond that of our competitors and far beyond WTO requirements.
People's lives are at stake. They need assistance, not Reform
members shaking their fists at international subsidies.
What should the government do to restore hope to Canadian
farmers? Let me outline a four point plan that must be
implemented immediately.
First, a program of emergency income assistance, at least $700
million, that matches the aid provided to U.S. farmers. Second,
in conjunction with the banks, a moratorium on farm foreclosures.
Third, improved debt management provisions for farm families and
the businesses that depend on them. Finally, we must ensure that
food is not destroyed, not ploughed under, not slaughtered and
left to rot in this crisis. This is food that could be used to
feed hungry people in crisis at home and abroad. We should make
sure that we take this humanitarian approach.
This has to be a national program to meet the needs of all
Canada's farmers. The national government must take the
leadership and the lion's share of the responsibility, leaving
room to be sure for supplementary programming from the provinces.
In closing, I want to say that agriculture is one of the most
hopeful and visionary of all occupations. More than an
occupation, it is a calling.
Each year a new spring gives renewed optimism for the future.
Better weather, better crops, better prices. We must ensure that
this coming spring is one of hope. If we fail, it will be
instead a spring of despair. We can make it a spring of hope,
but we must act quickly and we must act now.
1950
Mr. John Solomon (Regina—Lumsden—Lake Centre, NDP): Mr.
Speaker, I am very pleased to participate in the debate this
evening.
I was the member of parliament who on October 5 called for an
emergency debate on the looming farm crisis. My colleague the
member for Palliser had been raising this issue in the House of
Commons for weeks prior to that. We see the looming crisis now
upon us and I want to share a few reasons for that.
We have seen in Saskatchewan the net farm income to farmers
decline by 70% in 1998 over 1997. We have seen the price of hogs
basically collapse in the last four or five months. They are
decreased in value in terms of selling price by 60%, although at
the supermarket the price of pork is still the same. There must
be some kind of a gouging in the middle. Maybe the government
could look at that. Certainly the consumers are not getting any
benefit of this crash in the price of hogs, nor are the farmers.
I am sure it is some of the larger corporations that subsidize
and donate to the Liberal and Reform parties.
We have had a number of signals from Saskatchewan and other
parts of western Canada.
Donette Elder is a farmer at Fillmore who operates a farm
distress hotline. She told me that in her 15 years involved in
this operation, it has never been as busy as it has been this
year. The Saskatchewan government has a group which handles
stress calls from farmers as well. The numbers are way up. There
is a farm debt mediation services and farm consultation services
organization in Saskatchewan that deals with farmers who are in
financial distress with respect to their land. They deal with
farmers before it gets to the foreclosure situation. Their
business unfortunately is up 72% over last year. To date, 371
farmers have asked for mediation services with respect to their
financial condition which is an increase of 155 farms over last
year.
I have been in my constituency and other parts of the country. I
have been in Tugaske and Lumsden and Craik and Nokomis and
Brownlee. I met with hundreds of farmers. I never got to
Neilberg for the big rally. It is a little distance from my
constituency. I was in Ottawa at that time. I know that
Saskatchewan minister of agriculture Eric Upshall was there and
represented the NDP very well.
Farmers from Tugaske and other places are telling me that they
are in big trouble. Craik is a very small town, actually a
village, with a number of larger farms around the community.
There were 22 producers who could not pay their chemical bill as
of November 1 from the last crop year. Should an alarm bell not
go off in terms of what is happening? This is some of the finest
farmland in Saskatchewan with very high production and very high
yield.
We have seen the fertilizer costs go up 57% from 1992 to 1997.
We have seen farm chemicals increase 63% over that same period.
We have seen $130 million extra in cost recovery, for example the
privatization of the meat inspection facilities, that have gone
on the farmers' backs. We have seen the biggest problem that
farms and in particular grain producers and wheat producers are
facing which is the loss of the Crow benefit.
I went to the Council of Europe in Strasbourg, France. I happen
to have a community in my riding called Strasbourg. I went to
Strasbourg, France in 1995 to speak at the Council of Europe. I
went there as a delegate from this parliament. I had an
opportunity to meet with the 38 European countries that are
members of the Council of Europe. They meet quarterly and
discuss issues such as agriculture.
I met with the agriculture committee in 1995 I asked all the MPs
from the 38 European and eastern European countries what they
were doing to address the farm subsidy issue in their countries.
I told them that the Liberal Government of Canada was eliminating
the Crow benefit, which was a subsidy, because of the WTO
requirements. I said “We have eliminated our Crow benefit which
is about a $700 million benefit a year to our grain producers
which is guaranteed in legislation. We are eliminating that in
order to have good competition. What are you going to do about
it?”
They said “We have five years under WTO to address the subsidy
issue, not to solve it but to address it. If you think after
five years we are going to sacrifice our farmers for the U.S.A.,
you are crazy. We will never do that”. Three years later after
we have gutted the Crow benefit, the European Community and the
U.S.A. are providing not the same but higher subsidies than three
years ago.
Meanwhile we have abandoned our farmers.
1955
We can only draw one of two conclusions from this. Did the
Liberal government get suckered on this negotiation and
deliberately betray Canada's farmers, or did it deliberately do
it, knowing that it did not really care to support farmers in our
country? I sense it was both. The Liberals do not really like
farmers in western Canada because farmers do not seem to vote for
every Liberal candidate who runs. That is negligence on behalf of
the government. I would ask the government to consider that.
The final word I got was from a gentleman by the name of John
Germs. He is the president of the Saskatchewan pork producers.
He wrote to me saying hog farmers in Saskatchewan and other parts
of the country are suicidal because of the loss on their hog
farms. That is a very serious issue.
We should have long term solutions and short term solutions. I
am proposing five items for short term solutions.
We need to provide some disaster relief for farmers as soon as
possible. Some say $700 million. The NDP says $700 million is a
start. It is a good number for grain and pork producers.
We should accelerate or advance the date for the final payments
on wheat and barley to provide cash to farmers in a quicker way.
If NISA is used, and I am not advocating that it be used, but if
it is used it should be provided to farmers as quickly as
possible without the red tape that is required to get it. They
should only be allowed to use the tax free portion so they do not
have to pay taxes held on their NISA accounts.
The Government of Canada should deal with the input costs I have
referred to. We have a lot of farmers who do not have a lot of
bank debt in comparison to the farm crisis in the 1980s but they
do have more credit with suppliers such as fertilizer companies,
chemical companies, grain companies and machinery companies.
The government would do well to take my advice to pursue the
issue of gasoline and diesel fuel price fixing in Saskatchewan.
The farmers are being hammered on that input cost alone and it
should do something with it.
I think the agriculture minister has already said this, that the
government will deal with the financial institutions and work in
a co-operative and collective way to ensure that our farmers are
not taken advantage of by the institutions.
There are two long term solutions. We should address the issue
of the subsidies that the EU provides its farmers and the U.S.
provides its farmers. If they do not comply within a period of
time, let us say 12 months, then maybe we should be looking at
reinstating some kind of competitive agricultural program to
support our farmers.
There is another issue I want to raise in terms of long term.
When the Crow benefit was depleted, the deregulation of railroads
occurred at the same time. Farmers' transportation costs doubled
and in some cases tripled as a result of the deregulation and the
Crow benefit being taken away.
We have a serious situation with respect to the agriculture
economy. We have very solid recommendations from the NDP to the
Government of Canada to follow these issues to the end and make
sure that our farmers do have some sort of protection.
The Reform Party has touched on a couple of issues I want to
respond to. Many people tell me that the Reform Party has lost
touch with the bread and butter issues that first sent it to
Ottawa. In the House of Commons on November 3 I asked the Leader
of the Opposition whether under the circumstances with respect to
the farm income crisis he would support an emergency disaster
program, a relief program for farmers. He stood in this House
and said he would not support any kind of cash supports for
farmers in terms of the emergency.
The Reform member for Selkirk—Interlake, the agriculture critic
went to the Saskatchewan Wheat Pool meeting a week ago last
Friday where I spoke as well. Farmers pleaded to both of us to
support an emergency program. The Reform agriculture critic said
no that they were going to have tax cuts and if they ever make
any income it is taxable and they will do all sorts of positive
things.
To set the record straight, the Reform Party is not a friend of
the farmers. On the contrary, I think it is a friend of the
chemical and oil companies because the Leader of the Opposition
worked for the oil companies for many years. They fund his party
and they decide what policies the Reform Party will undertake and
support in the House.
2000
People in this country are telling me more and more that the
Reform MPs are letting ideology get in the way of common sense.
Farmer after farmer, business person after business person,
housewife after housewife, every person I speak to in
Saskatchewan tells me the Reform Party has lost touch. That is a
very serious condition, in particular when we are trying to
defend and support an agricultural sector that is under attack
not only by the European Community and the U.S. but by the Reform
Party inside our own country.
Mr. John Harvard (Charleswood St. James—Assiniboia,
Lib.): Mr. Speaker, I will be sharing my time with the
distinguished member for Hastings—Frontenac—Lennox and
Addington.
Earlier this evening I listened with interest to the remarks of
the hon. Minister of Agriculture and Agri-Food. His 25 years of
experience as a farmer show that he truly understands the extent
of the problem some Canadian farmers are currently experiencing.
Like Canadian farmers, I am very pleased and reassured to see the
minister is on top of the situation and that he is acting on it.
He is doing everything in his power, everything he can, to tackle
this issue. He has kept everyone in the House well informed of
the situation. He has had ongoing discussions with industry, the
financial community, the provinces, his cabinet colleagues and
the members of the House to encourage all of us to work with him
in putting forward concrete solutions to this very real problem.
We all agree that the agriculture and agri-food sector is
crucial to the Canadian economy. It is one of Canada's top five
industries and it is Canada's third largest employer. None of us
can afford to let it go down the drain. We all agree that what
Canadian farmers need right now is some type of assistance to
help them deal with the situation on a short term basis. They
need a program to keep their businesses going in a very severe
unprecedented downturn.
That is where the whole discussion about a combination of
programs comes into place. The minister and cabinet are working
to develop the right mix, the right combination of programs,
including the use of the present system of safety nets and the
creation of a national disaster program.
We all agree our plan of action must not only deal with the
short term, which this government is doing under the direction of
the Minister of Agriculture and Agri-Food, but we must also focus
on longer term effective solutions. As markets around the world
gain strength, and we know they will, Canadian farmers must be in
a position to capitalize on that economic renewal.
Our record performance of the last four or five years will come
back. It will come back because we have a highly competitive
industry and even in the face of the current market downturns we
are doing what we need to do to get ready for the future. The
perfect example of that is the ongoing consultation with the
Canadian industry to put together a strong negotiating position
for the upcoming round of negotiations at the World Trade
Organization.
As chairman of the Standing Committee on Agriculture and
Agri-Food, I can say that organizations within the industry from
one end of the country to the other appreciate that we have
invited them to give us their input on the kind of negotiating
position we should strike for the beginning of the WTO
negotiations a little more than a year from now.
These negotiations represent an important opportunity for Canada
to maintain and extend its competitive advantage. The talks
represent a unique chance to continue what we started over four
years ago when we signed on to the WTO agreement at the end of
the Uruguay round. That round brought some semblance of order,
some rules to world trade in food and agricultural products.
2005
However, the current farm income troubles have a lot to do with
poor world market conditions, conditions that have been worsened
by the protectionist mood in some parts of the U.S. and by the
EU's continued use of subsidies.
Canadian farmers are justifiably worried about what might be
around the corner. I want to reassure them that this government
is doing everything in its power to dissuade the EU and the
United States from falling into another trade subsidy war. We
are absolutely committed to continue working on this front.
Members heard the minister say he will continue to talk on a
bilateral basis with leaders of the United States and Europe. We
also intend to fully use the next WTO round to put an end to the
big powers' trade distorting tactics.
Subsidies especially hurt smaller and medium size countries like
Canada. They are a detriment to a strong and healthy global
agricultural economy. Canada will be pushing hard in these
negotiations for a multilateral commitment to phase out
agricultural export subsidies once and for all.
Such subsidies were banned for industrial products in the mid-1950s.
Surely after half a century it is time to rid the agricultural
sector of this most aggressive and unfair form of government
support. Producers in one country should not have to compete
against the treasury of another.
Whether wheat growers in Saskatchewan, Argentina or in the
United States, farmers are a vital and valued part of society.
No matter who we are or where we are from, we all have the same
goals of strong agricultural economies, prosperous rural
communities and a decent standard of living for those who work
the land.
Over the next year the Minister of Agriculture and Agri-Food
will continue to consult with industry groups to craft a solid,
unified negotiating position that takes into account the full
spectrum of interest within our diverse agriculture and agri-food
sector.
This round of talks is one further essential tool in our long
term strategy for the sector. As members know, these sorts of
negotiations take time. They are very much our long term
approach.
This government has heard the industry's call for a disaster
program to deal with the immediate very serious income shortfalls
and we intend to take short term action as well as action over
the longer term.
I conclude on one extremely important point the Minister of
Agriculture and Agri-Food has made over and over again since the
farm income ordeal began.
Our long term and short term strategies must first and foremost
be complementary. One cannot hurt the other. One cannot take
precedence over the other. Our solution to this extraordinary
situation must be what we call WTO green.
Canada cannot afford to open the door to any further
countervailing actions from its competitors. That is why the
government, including the Minister of Agriculture and Agri-Food
and the Minister for International Trade, is working very hard to
ensure that whatever we do will be ultimately helpful and will
not hurt our producers or taxpayers by generating retaliatory
trade actions.
I remind members the hog industry is one that has lost a lot of
money to countervailing actions in the past and none of us wants
to see that again.
That is why the government is taking the necessary time to
design the very best possible program, a program that meets the
needs of farmers and all Canadians and programs that are WTO
green so that the money ends up in the pockets of farmers.
Mr. Larry McCormick (Hastings—Frontenac—Lennox and
Addington, Lib.): Mr. Speaker, I appreciate the opportunity
to speak on the emergency debate on farm income.
I am very glad that our Standing Committee on Agriculture and
Agri-Food has been listening to witnesses from almost all
commodity groups across the country for several weeks.
2010
Because this crisis is very real we want to work with all
involved to assist our farmers.
The Minister of Agriculture and Agri-Food has spoken with
passion and conviction about the serious situation in farm
income. I know his commitment to deal with this problem is
sincere and his response reflects the nature of the challenge.
Demand for key agricultural products in Asia and Russia has been
drastically reduced as the buying power of consumers has shrunk.
The link between the global financial crisis and farm income in
Canada is not a matter for debate.
Combine this with the simultaneous cyclical price downturns in
grains, hogs and cattle and pockets of poor production in some
areas and we get a situation in which many producers are seeing a
pretty significant reduction in income this year, in fact a
drastic reduction.
There may be some members who would argue the answer to these
problems is insulation from the global economy, but that reflects
their simplistic view of the world rather than compassion for
those affected by this crisis. Offering complaints cannot be
equated with offering solutions and what people need are workable
solutions.
Talk of removing Canada from global markets, international trade
and the need to export makes great rhetoric but will not make one
iota of difference to the financial security of men and women
working on Canadian farms. Neither will bland complaints about
not getting everything we want or when we want it from trade
negotiations.
Let us do our farmers justice by eliminating the rhetoric and
instead working together to offer practical responses to a
complicated problem.
The responsibility of governing demands that we offer the
pragmatic and not the dramatic. As this government has done in
the past, we will continue to work with farmers and provincial
governments to put programs in place that are equitable and
available to all in need, no matter what province they live in.
We will also work with these same partners to develop a strong,
united and compelling position for international trade
negotiations. In bringing forth long term and short term
responses to this serious situation, we are committed to both
collaboration and co-operation.
Canadian farmers have a right to expect such an approach to this
problem. There is no room for theatrics or one-upmanship given
the nature and the magnitude of the problem.
Our most recent farm income figures, and let me underline that
these figures were developed with the provinces, show that at the
national level overall net farm income is down 4% from the
average over the last five years and down 20% from 1997.
Of course that aggregate number hides the problems we know
exist. Some parts of the country are suffering worse than others
and depending on the commodity, some producers are practically
unaffected while others are hurting very severely.
We know there are serious problems in the hog and grain sectors.
The majority of hog producers are in Quebec, Ontario and
Manitoba and yet Atlantic Canada has significant hog production
and so these areas have been affected.
The majority of grain farmers are in Saskatchewan, Manitoba and
Alberta. There are grain farmers in parts of Ontario. There are
wheat farmers in my riding. Meanwhile we must not forget that we
have other producers who experienced serious droughts and even
outbreaks of disease such as scrapie. This is the full context of
the farm income situation and we must recognize all the forces at
work. Doing this will help to bring sense to the numbers.
Looking at these problems regionally we see that in Prince
Edward Island, Saskatchewan and Manitoba the situation is
particularly serious. Realized net farm income is forecast to be
down 40% this year in P.E.I. and Manitoba while in Saskatchewan
farm income could fall almost 70% relative to the previous five
year average. Unfortunately our current forecast also predicts
that those who are having trouble this year are not likely to see
improvements next year.
I know there are a great many people in communities from coast
to coast facing hardship and who are looking to the Government of
Canada for relief and assistance. There are other pressing
issues that demand the attention of the federal government. It
is not one or the other. We must find a way to do the best we
can for all these people.
2015
The farm income situation is not one that the government will
retreat from any more than it will retreat in the face of any
other challenge. We want to fix this problem as quickly as
possible in order to bring some sense of calm back to the sector
that has become increasingly desperate in recent days.
Moving forward, not backward, requires partnership between the
levels of government. That principle was established in previous
events. As with the ice storm earlier this year, the federal
government will pay its share. The provinces can count on that.
In designing our immediate response to the farm income
situation, we will shoulder our load. Clearly provincial
governments in affected areas will also have a load to bear, and
that is unavoidable. The challenge is to design a response that
divides the load and best serves the public interest. Again this
is a sincere and pragmatic approach and reflects the
responsibility of government.
There is never a place for adversarial relationships between
federal and provincial governments. In the current situation
this is especially true. The Minister of Agriculture and
Agri-Food has made it clear that he wants to work with the
provinces in addressing this situation. Farm organizations and
both levels of government are now working on solutions that
address conditions in the affected regions to meet the needs of
those most affected.
The minister has also emphasized the need for open
communications and a transparent process to let people know what
is happening. Solutions will come from this hard work. Effective
programs will be produced by this approach. Will it be flashy?
No. Will it be a total cure? I think not. There are no quick,
easy or total solutions.
Workable and meaningful solutions do not have to be flashy or
miraculous in order to make a difference. Making a difference is
part of governing. The Government of Canada is committed to
making a difference in the farm income situation.
Mr. Garry Breitkreuz (Yorkton—Melville, Ref.): Mr.
Speaker, I have a one hour speech but you are not going to give
me an hour. I prepared a lot of my speech in advance because I
knew this debate was coming. I will lay aside my speech, if I do
not have this hour, and I will be sharing my time.
I am not here to score cheap political points as some of the
other political parties. I was to describe the farming
situation. Instead this evening I will read to the House,
describe to the House and give the House some of the comments
farmers have made directly to me.
I will start with a letter from Bill Lozinski that I received
last week. I am hoping the government will listen because the
people I will tell the House about today are real people and they
need to be heard. This is what Mr. Lozinski had to say:
Dear Mr. Breitkreuz,
I do not feel guilty or ashamed to be paid fairly for what I
produce. The unfairness in today's agriculture situation is
unbelievable.
One bushel of wheat will produce approximately 125 loaves of
bread which amounts to $250 (give or take a dollar or two)—
That is if they are bought in a grocery store. He went on to
say that farmers get $2.50 of that amount. Out of the $250 that
it cost people to buy the bread, he says farmers get $2.50. He
continued:
Let me stop here for a minute. I used his calculations. Does
the House know that from one acre a farmer can produce 3,750
loaves of bread? That is how much these farmers are producing
and he said that they are not getting anything for it. Yet the
people of Canada are benefiting. Let me continue with his
letter:
When farmers have money, the economy thrives. I once read that
one dollar in a farmer's hand is multiplied 15 times because it
is put into the economy in so many different ways.
We are not a burden on the taxpayers. We subsidize every person
who buys groceries. The cheap food policy is killing rural
Canada. When the price of food goes up in the store, farmers
never see an increase in commodity prices. In fact, it's going
backward. We are making a lot less.
(The price of a bushel of wheat in 1929 was $2.65 a bushel).
2020
We can compare that to around $2.50 or $3.00 today. Things have
not changed but everyone knows what has happened to costs. Let
me get back to his letter. It is very interesting. It went on
to state:
My brother-in-law lived in Switzerland for the last three years.
Their grocery bill was about 50% of their gross income. A pound
of hamburger was $15. A half a loaf of bread was $3.50. A
turkey was $85. (Not even a good one, according to my
sister-in-law). Their farmers receive an outstanding price for
their commodities. I'm sure you have heard the stories of $12
for a bushel of wheat. Well, the truth is they make a lot more.
Their farms are small and they have a lot of them. They are more
numerous than most farm families here.
I cannot read all of his letter so I will go to the end of it:
A strong and diverse rural economy is in everyone's best
interest. It is not a question of can we afford $50 an acre to
offset the low commodity prices. We cannot afford not to.
That is the point. At $50 an acre we cannot afford not to have
that. He continued:
Thank you, Mr. Breitkreuz, for your efforts. You can't even
imagine how important this issue is today and will become in the
future. Affordable food is the single most important thing in
all our lives. Let's make sure it doesn't become the thing that
kills us in the long run.
Let us listen to what he has to say. I especially address that
to the people in the cities who are listening today.
I have spent a lot of time and effort finding out what farmers
in my riding have to say in this regard. I have received over
1,000 replies in the last week alone on this issue. In the last
few hours I have attempted to summarize what these people have to
say.
Is there a farm crisis? Ninety-two per cent of the people who
contacted my office, a mix of farmers and non-farmers, say that
there is a crisis. About 70% of the people who have been
contacting my office are farmers. Eighty-seven per cent of those
who contacted my office said that it was affecting them directly.
Another question they responded to was what is causing this.
Quite a large percentage said that what was hurting them was that
input costs were too high. The second thing they emphasized in
regard to what is really hurting them is the grain prices that
are too low. Those two factors were the key factors causing this
crisis.
How is this manifested? They cannot pay their bills. They are
forced to get off farm jobs, which is creating a lot of stress
for them. Businesses are complaining that farmers are not
spending money in the communities around the farms and incomes
have dropped substantially. That is what I am hearing from the
people in my riding as I try to summarize all the responses in
this regard.
Another thing I have been asking a lot of the people is whether
NISA and crop insurance is good enough. This shocked me. Ninety
per cent of the people who responded to my office said NISA and
crop insurance were not enough to address this problem. I hope
the government is listening, because it is not Reform or me who
is saying this. This is what the farmers are telling me.
What are the solutions? Where are we to go on this?
Approximately 50% of the people are saying they need some
emergency help right now. A good percentage are saying they need
help in transportation. Another thing they emphasize is that
they need tax reductions. Almost half of them are saying they
need some form of tax reduction.
I was quite surprised at the next one. There are very few who
say they need to be able to borrow more money. They do not see
that as an answer. There is also quite a large percentage that
says user fees must be stopped because they are killing them. I
guess everyone knows there is about $138 million in that.
If there is to be some emergency aid, one of the things I asked
them was how they would like it to be distributed. I think this
is important so I hope the government is listening. Over 50%,
the vast majority, feel that it should be a per acre or livestock
production specific. They feel that would be the fairest way for
the government to address this issue.
2025
NISA did not score very high. Less than 5% said that if we
improve NISA it will somehow help. About 10% of the people said
that we needed a guaranteed price for our grain. By and large
they felt that a per acre payout of some kind or some livestock
specific production was needed.
I have also gone ahead and summarized a lot of comments. Members
have to realize that when one gets a 1,000 letters and responses
coming into a riding on this issue it is very difficult to have
everybody's opinion tabled in the House of Commons. I will
quickly summarize them.
Most farmers said that NISA was useless. The ones who have
money in it are wondering why they should be forced to take their
money out during these tough times as they are using it for their
retirement. The other farmers who are really struggling have
said they have either withdrawn all their funds already or have
very little money in their accounts and it will not make any
difference in keeping their farm operation alive.
Farmers have said that NISA needs to be improved. Contributions
could be increased from the federal government and the penalties
would not be so high for those who withdraw their funds at the
wrong times of the year.
Another group of comments come from business people. They are
concerned about a farm aid package. Business people feel that it
is tough for them as well. They say times are tough. Businesses
are not getting any handouts from government, so why should
farmers get these handouts when times are tough? These business
people also say that if the farm economy fails so will their
business. From that point subsidies are seen as not being so
bad.
Most farmers see the solution to a farm aid package on a per
acre in production basis. Farmers want to be sure however the
money does not go to landlords but goes to the person who is
renting the land and using it to produce a crop. As for the
production set aside, farmers think there would have to be some
type of formula developed for each livestock producer and that it
would have to be tied to their cost of production.
In conclusion, some farmers are talking about the absurd prices
for inputs: fertilizers, seed and chemicals. They say there
needs to be some type of a cap on these costs. A tax reduction
would help eliminate some of these but producers respond by
saying that chemical companies will not lower their prices. They
will increase their profit margin.
I have another 50 minutes in my speech. I will conclude by
saying I hope the government will talk to me. I have been
talking to farmers one on one. I have received over 1,000
responses. I would ask the government to please be open. I
would like to work co-operatively with it in addressing the
issue.
Mr. Jake E. Hoeppner (Portage—Lisgar, Ref.): Mr.
Speaker, I will add the 50 minutes to my hour. Then maybe we
will get through this issue. It is a pleasure to say a few words
but it is also a sad moment for me.
There is a crisis on the farm scene. Nobody doubts that. There
is a bigger crisis in the Liberal front benches. I do not see
any of them over there. That is where the crisis is. I am
almost blind but I noticed it somehow.
I will read a couple of quotes. Since I was elected in 1993 we
have worked on the agriculture committee. We pointed out to the
government that we need a whole farm income support program. This
is a question that was put by the member for Haldimand—Norfolk
to the agriculture minister on February 9, 1994.
In the red book we promised a system of whole farm support that
would help Canadian farmers who were in distress. This was in
1994. The agriculture minister replied:
I appreciate the question. Under the previous government in
conjunction with provincial governments a process is under way to
review and revamp Canadian farm income safety nets.
That has never been accomplished. Why not? In 1994 everybody
knew that the Europeans had huge subsidies. The Europeans would
not allow their farmers to get into a financial problem. They
would support them. We had to be prepared to have some safety
net programs in place.
How huge is this crisis in farming?
2030
I was quite appreciative of the member for Yorkton—Melville
when he started comparing prices. I know there are a lot of
supply management people in this House who have been supporting
that type of system. These are prices for their products. From
a devilled egg that costs $1.60, they get 10 cents at the
farm gate. From a whole quiche which costs $12.50, which has
three eggs, 2 ounces of cheese and 16 ounces of milk, the farmer
gets 92 cents. From a 6 ounce grilled breast of chicken, costing
$8.20, the farmer gets 29 cents. This is in the supply
management sector. When we go back to the wheat and the hogs, as
the member for Yorkton—Melville pointed out, it is disaster.
I saw a letter from a farmer who said “If you can imagine, in
1981 I received $4 a bushel net initial for No. 3 hard spring
wheat. Today I receive $1.80 for that same type of wheat”. It
is not even one-half of what this farmer received in 1981.
We know what has happened to the price of fertilizer. We know
what has happened to the price of equipment. We have a pretty
good idea of what the cost/price squeeze is.
How are these farmers supposed to deal with this? Farmers have
been looking far and wide to see if they can get better prices.
It is astounding that the special crops industry has not done too
badly. The canola prices this year are such that if it was not
for that income I think 100% of the farms would be in crisis. At
least they have some value from the special crops industry with
which they can supplement their income.
In the 1992 crop year in Saskatchewan grain was damaged by
frost. It looked like everything would be turned into feed.
Saskatchewan farmers looked across the border and found a market
where they realized they could pretty well double the price for
their feed wheat. What did the grain companies and the wheat
board do? They dumped 1.5 million bushels into that market and
ruined it.
In 1993-94, when Manitoba had the fusarium problem, what
happened? Farmers who found a market for that product were not
allowed to sell to that market. It was demanded that they get an
export licence from the wheat board and they were charged as much
as $40 to $50 a tonne more for that grain than they got in the
final return.
Farmers who did not abide the law and marketed it on their own
wound up with huge penalties, fines and even jail terms. Is it
democracy when farmers are in a financial bind and they know
there is a market a dozen or two dozen miles way that they can
access but are not allowed to? If they do, then they are put
away.
One of the farmers drove all the way from Saskatchewan to the
Manitoba border crossing to object and to protest. He got worse
than the APEC protesters in Vancouver. He was not allowed to go
back without paying a fine. He was fined $1,500 and was told to
turn his car in. Andy McMechan, as we know, had some barley
which no one could market for him. It was a specialty barley.
He wound up in prison.
Farmers will find a remedy. I had at least half a dozen farmers
phone me last week. They said “I don't need any money. If you
can get me a guarantee that I can market my own grain, don't
bother with any payments. We will make it. We will find a
market and we will survive this crisis”.
2035
How do we deal with this? On the one hand we have markets that
have developed themselves because of crisis issues, but other
markets are not allowed to be developed to the point where they
pay properly. That more or less puts pressure on farmers to go
to markets with decent prices so they can survive, make their
farms viable and have more over-production.
The hog producers in Manitoba, Saskatchewan and Alberta did not
want to get into these huge hog operations because they knew it
would cost a small fortune to build the barns, but they had no
way out. The feed grains were such a price that they could not
afford to keep their farms viable. So with provincial
encouragement they expanded and diversified. Today they are
losing $50 to $60 a hog.
I ordered bacon and eggs for breakfast this morning and I
figured I would get a plate full of bacon because pork is cheap.
They could do away with the potatoes and give me the bacon. They
could have taken that bacon off a live pig and it would not have
lost a squeal. That is the amount of bacon I got. It was
worthless. How do we deal with a situation like that? it is
funny, but it is true. I did not have to swallow too hard to put
those two thin little slices of bacon away with one swallow. Then
I had the two eggs left with a bit of toast.
Guess what that toast costs at that restaurant? A bushel of
wheat yields about 120 loaves of bread, which amounts to about
two cents a loaf. If a loaf has 24 slices and I had two slices,
there would be one-twelfth of a cent of wheat in that toast. How
can the price of the breakfast be $5? I know the potatoes do not
cost that. I am astounded. Farmers are supposed to survive and
they are not supposed to be subsidized.
Mr. Hehn appeared before the standing committee. I asked him
why we were not getting better prices for our wheat. He said
they were pricing it at Thunder Bay. I asked him what if they
priced it in Manitoba and he said that this was the price. The
price of a bushel of wheat was initially $1.57 at the elevator.
The buy-back price was $3.93 at Morris, not at Thunder Bay.
It does not make sense. Farmers cannot survive. Subsidies are
part of the problem, but politics and the marketing system are
probably more to blame than the Europeans and the Americans
thrown together in one washtub.
Mr. Paul Steckle (Huron—Bruce, Lib.): Mr. Speaker, I
will be sharing my time with the hon. member for
Lambton—Kent—Middlesex.
I am pleased to have the opportunity to address the motion
currently before the House.
Each day in this place we as parliamentarians collectively
undertake to explore and debate numerous subjects of a widely
varying degree of weight and sensitivity. This issue is perhaps
one of the most consequential topics examined by this parliament.
I do not wish to come off as sounding melodramatic, but each and
every one of us likes to eat each and every day. It is for that
very reason that we must decisively act now.
Tonight we are participating in an emergency debate. It is an
emergency because Canadian farmers cannot wait six months for
further action.
2040
It is no understatement to say that Canadian agriculture today
finds itself at a crossroads. The current crisis, if left
unchecked, will without a doubt spell certain disaster or perhaps
even a virtual collapse in market share for the small and medium
sized members of this founding national industry.
I would venture to say that there should not be a single member
of this House who is not cognizant of the massive financial
challenges regularly faced by the farming communities across this
land.
Drought, frost, disease, high overhead costs and fierce
competition are all factors dealt with on a regular and recurring
basis by our primary producers.
However, the impression should not be given that these
challenges have not been without benefit. As a lifelong farmer
myself, I can honestly say that, due in part to these daily
complications, the Canadian agricultural industry has evolved
into one of the most competitive and efficient of its kind in the
world.
With that being said, when one adds new and complex problems
such as low and dramatic vacillations in commodity prices upon
the already heavily laden shoulders of our farmers, is it any
wonder that we are now faced with a crisis.
I represent one of the largest agricultural producing
constituencies east of the Manitoba border. In my home county,
Huron county in southwestern Ontario, we have nearly half a
million hogs, a number that exceeds the human population of Huron
by a factor of 7.
With this in mind, people can understand that the current drop
in the price of pork has devastated this commodity group. For
those who might not be aware, only a few short months ago a pork
farmer would receive somewhere in the neighbourhood of $2 per
kilogram for his product. That same producer today would be
fortunate to receive 60 cents.
The problem posed by this is that the input costs remain. It
has been estimated that the average pork producer will take a
loss of $60 for every fat hog sold at today's prices. I
understand it is even higher than that.
Over the last number of days I have listened and corresponded
with untold numbers of pork farmers in my riding of Huron—Bruce.
We have been told that if we do not act immediately and if help
does not coming right away, their doors will be closed by
Christmas. They have no choices available. They cannot afford
to keep their pigs and they cannot afford to sell them.
This is a sad reality, but worse is the statistical probability
that this slump will expand into other sectors. Cash crops,
beef, sheep and lamb are all at risk.
I think members would agree that failure is simply not an option
for us. Surely adequately feeding our population should be
paramount in the minds of any responsible legislator. In
addition, we must also be aware that agriculture now enjoys the
status of big business in Canada. In fact, in addition to
employing thousands last year, it contributed approximately $20
billion to our national economic output.
The world population is expected to exceed seven billion by the
year 2000, a fact that means global production of sustenance must
increase exponentially. If given the chance, Canada can assume a
leadership role in this endeavour.
The potential is endless only if we maintain a stable economic
foothold in the markets. Our agriculture industry has already
grown in leaps and bounds during the course of the 20th century,
a trend that I strongly feel should be encouraged to continue.
Sadly, as we progress toward the next millennium, the days and
the ways of the small family farm face the very real prospect of
being moved out to pasture. We are approaching the proverbial
fork in the road.
With the rapidly developing and expanding global economy, we can
no longer blindly pump public money into controversial and
bureaucratic ad hoc programs.
Farmers need a hand up, not a handout. Strategic investment
into key areas of growth is essential. Failure to do so promises
to be the final nail in the coffin, that of the family farm.
Members must understand that the family farm has been the
backbone of the agriculture sector for over a century; a backbone
that if broken will seriously cripple our nation's ability to
ensure certain quality controls, availability and security.
2045
If something is not done immediately, I see Canada's farming
industry then approaching the same slippery slope that our
American neighbours fell victim to. Today U.S. corporate giants
such as Tyson, Perdu Poultry and Archer, Daniels Midland have the
ability to use their dominance and control over the food supply
to hold the American consumer hostage. We simply cannot permit
that situation to occur here.
We need look no further than our largest trading partner and
neighbour to the south to see the potential danger lurking around
the corner. In the United States farming is corporate territory
controlled exclusively by market fluctuations, shareholders and
large multinationals, a reality that should be unsettling to say
the least.
There are those among us who believe that bigger is always
better. To those people I would simply say that bigger can be
good but it does not always mean more efficient. In actuality
when a corporation reaches transnational status it usually means
power, not necessarily accountability or effectiveness.
One only has to read the mission statement of corporations such
as ADM, Monsanto or ConAgra to see that their primary objective
is increasing the accumulation of wealth for their shareholders
rather than advancing the business of farming for any greater
purpose.
To that end I would draw attention to the fact that in the
United States poultry industry 38 firms now have 240 processing
plants that are responsible for almost 98% of all U.S. chicken.
In reality there are only 38 chicken farmers in all of the United
States.
In my riding of Huron—Bruce I have 150 operations. In fact,
the U.S. chicken farmer is little more than a labourer who
receives a meagre 3 cents to 4 cents per pound to grow broilers,
a number that would certainly not be acceptable by our own
chicken farmers.
It is also important to mention that this figure has remained
virtually stagnant and unchanged since the mid-1980s. Stability
is one thing, however the unfortunate reality is that the cost
incurred by the American farmer has not remained static.
Mortgages, taxes and land costs are on the rise. As a result
their farmers are subjected to the whims of the corporate masters
while being forced to take all the financial risks associated
with managing a farming operation of this type. Even with their
high risk factor they have no chance of increasing their own
profitability, unlike our supply management sectors in Canada.
As unsavoury as this type of arrangement sounds, it is not
isolated to the American poultry industry. To the contrary, it
is the norm and not the exception in almost every facet of
American agriculture. In sheep slaughter the largest four
national producers control nearly 70% of all production. IBP,
ConAgra, Cargill and Beef America command dominance over a
whopping 78% of the entire American beef sector. In the U.S. 20
feed lots market over 50% of the fed beef. In turkey the four
U.S. giants, Rocco Turkeys, Hormel, Carolina Turkeys and ConAgra,
account for 35% of the business, and these numbers go on and on.
As a rural Canadian it frightens me to think we might be moving
in the same direction but that is the reality of the situation
currently before us. In a nutshell, if we fail to act
immediately our small and medium size producers are doomed. With
them out of the way their larger competition will simply move in
and take over. Rural Canada then becomes a little more than a
branch of corporate America.
I would simply ask all our colleagues to be aware of the gravity
of the situation. Talk is cheap and the price of pork even
cheaper. In a world of high input costs, unpredictable growing
conditions, El Nino, taxes, the Asian flu and the like, the
margin of profit for farmers is shrinking fast.
The real question is should we be asking ourself today where do
we see Canadian agriculture in the next century. We have a
reputation for quality. It could be said that even with the new
high tech integration and massive demands on our time Canadian
farmers are considered by the world to be among the best and the
brightest. Our commitment to excellence is strong but help is
needed if we are to continue to be outstanding in our field.
Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): Mr.
Speaker, this is an important debate tonight and I congratulate
the member for South Shore for proposing it.
As members will know, headlines and news broadcasts every day
and night highlight the farm income crisis. The family farm is
under siege. Any sensible approach to helping with this crisis
would involve examining the reasons behind the crisis because no
farmer wants a subsidy and taxpayers from coast to coast to coast
generally oppose multimillion dollar bailouts that would serve no
useful purpose other than to neutralize the daily headlines
calling for a quick fix.
This problem is international in nature and thus we must look at
the big picture. To me a grain farmer in Saskatchewan is just as
important as a hog farmer in Lambton—Kent—Middlesex in Ontario.
I am confident the Minister of Agriculture and Agri-Food in
co-operation with his provincial colleagues and with producers
groups will arrive at an equitable solution that is fair both to
the industry and to the Canadian taxpayer.
2050
As I mentioned in the House this afternoon, pork producers, for
example, are selling hogs for about half the cost of production.
There is now a huge oversupply in the marketplace. With the 15%
expansion in production in the past two years, with the weak
demand and foreign subsidies further distorting the market, the
farm income crisis is a complex problem with no easy answers.
There is a discussion on a combination of programs, including
the use of the present system, the safety net. We have certainly
heard very clearly from the farmers their desire for a national
disaster program. In very severe situations this will kick in
and give some support to the farmers when the current safety net
system may not be sufficient. Grain and pork prices are at or
are near historic lows. Farm income is also depressed for many
producers of other commodities as well. While the effect is not
apparent in provincial estimates of total farm income for
provinces with diversified agriculture such as Ontario, the
damage is every bit as severe for affected farmers in Ontario as
any other province.
The Middlesex county portion of my riding produces more
agriculture commodities than that of Nova Scotia, New Brunswick
and Prince Edward Island. It is big business. My riding alone
produces nearly half a million hogs per year. The pork industry
supports $4.51 billion worth of economic activity in Ontario
alone.
The proposed national disaster program should work well for many
Ontario pork producers if it can be implemented quickly. At 56
cents a kilogram hog farmers are losing between $55 and $60 for
every pig they send to market. A farmer with a 300 sow operation
is now losing $1,000 a day. To find prices that low we have to
dust off the history books as far as 1972, but even that is not a
real comparison due to inflation. In 1972 a pickup cost $5,000.
Today it can cost $25,000.
Several years ago agriculture economists predicted the Asian
market would be an excellent place for Ontario pork. Saskatchewan
even subsidized farmers to switch over to hogs. Not only did
Ontario and Canadian farmers expand, so did the Americans. In
the third week of October 1998 Ontario farmers shipped 104,000
head, the largest number of hogs ever sold during one week. In
the United States weekly hog sales were also breaking records.
Low demand is now resulting in low prices and oversupply.
Meanwhile grocery store profits are up 20% for Loblaws, 21% for
Empire and 38% for Oshawa Group. Someone is still making money
but it sure is not the farmer.
I have also heard from farmers whose NISA accounts are drained,
as well as their RRSPs.
I have heard from constituents on the other side of the issue
who state that the pork industry expanded and some are still
expanding, building bigger barns, now with a product for which
there is no market, so why bail them out.
I received an e-mail today from a cash crop farmer in my riding:
“I am puzzled. The North American pork industry is big,
efficient and has been profitable. There is a speed bump in the
market and there is this great cry for help from taxpayers. I
support our agricultural community wholeheartedly but sometimes we
in the farming business need to reassess our position. When corn
prices are low and there are a lot of acres being planted in the
U.S., farmers take a look and then they decide perhaps they
should get their bean drills out and plant a few more acres of
beans. Is the Government of Canada going to support the hog
farmer enough, because they will need more than just this rescue
package to make them world competitive?”
The situation is far different, however, for grains and oilseeds
where the basic market problem involved huge U.S. and European
subsidies which are likely to depress prices for longer
durations.
A program such as the proposed disaster relief by the Canadian
Federation of Agriculture would provide support at 70% of a three
year average. It would only provide short term help for grain
producers. GRIP uses a 15 year average.
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Former grain stabilization programs which provided support at
100% in the prairie provinces and 90% in the rest of Canada were
thrown out in 1991 because the five year averaging period was too
short when grain prices are depressed for several successive
years by foreign subsidy awards. It is a difficult situation to
be sure with no easy answers. However, I am confident that the
minister and his officials will provide a sensible approach to
this issue.
We must also look beyond our borders. As members know, it took
45 years before agriculture became a formal part of the WTO
agreement. But even with a foot in the door, much remains to be
done. Many high tariff barriers remain in place. The procedures
for enforcing agreements are very loose and backsliding is
common.
The GATT has been revamped and the membership is now bigger and
growing. Our country, as an efficient and profitable exporter,
as an immense interest in the reform of agricultural trade
barriers. It is also equally true that countries which protect
their inefficient agriculture producers have an intense interest
in maintaining trade barriers. The United States and the European
Union in particular typically defend subsidies when the truth is
that they hurt their own producers as much as they hurt ours.
If we understand the reasons for this contradiction, we would be
well on the way to resolving many of the quandaries of
international trade. We must address and develop a set of
actions that will lead to more liberal trading arrangements for
agriculture in the years ahead. Only then can we avoid the
warped market we see today.
We need to find answers because they will form the building
blocks in the construction of new rules for global trade in
agriculture and a more prosperous future for all the farmers we
represent.
In 1941 the Atlantic charter, which became the rationale for
GATT, stated its aim was to ensure that after the war all
countries “great or small, victor or vanquished, would enjoy
access on equal terms to the trade into the raw materials of the
world”.
Today that seems to be still a very big goal. Canadian farmers,
like all farmers, understand they have a responsibility to feed
the world and guarantee a secure future in food supplies. As we
do that we have a responsibility to support our farmers through
this difficult process, not to abandon the process.
The challenge for Canada and other countries over the next 52
years is quite simply how are we to feed a world of 10 billion
people, the estimated population by the year 2050. What it means
is we have to produce double the amount of food we do now. Even
in the next 25 to 30 years the world will need to produce 300
million tonnes more of wheat, 260 tonnes more of corn and 16
million tonnes more of fish.
Farmers understand this is attainable if they are paid a
reasonable and fair price for their efforts. The people who eat
the food must understand that as well.
Trade liberalization is the key to an efficient and affordable
world food trading system. Unfair subsidies from the United
States and the EU are trade distorting. We must all be committed
to the reduction of trade subsidies, and the rest of the world,
if it wants to be fed, will sooner or later need to come to grips
with that.
Stepping on to the world stage, mixing it up with competitors
such as the United States, Europe and Japan is a very rough
environment and Canada has been succeeding. We are now
experiencing a bump in the road with some prices hitting levels
not seen since the Great Depression. Many would say this is a
unique downturn under special circumstances that requires a
national collective effort.
Hon. Lorne Nystrom (Regina—Qu'Appelle, NDP): Mr.
Speaker, I want to say a few words about the farm crisis we are
facing which is particularly difficult in my home province of
Saskatchewan where it has been hitting harder than in any other
province in the country.
Farm income in Saskatchewan is down by 70% or 80%. The net farm
income for grain farmers, I understand, is down by about $300 and
some million. There is really a very severe crisis in the
province of Saskatchewan and something has to be done about it in
both the short run and in the long run. That is why this debate
is very important this evening.
Over the last couple of months I have had a lot of farmers speak
to me in my riding. My riding is roughly half of the city of
Regina and half outside the city of Regina. I think we have
something like 1,500 farm families in the riding.
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We received a lot of calls and letters from these people saying
that they were in dire straits. Much of what is happening is not
the fault of the farmer. Two things have occurred that put the
farmer in a very difficult position today. The main thing is the
trade and subsidy war that is going on in Europe and the United
States.
To give an idea of what I mean, the American farmer is
subsidized five times higher than the Canadian farmer. Just this
fall the U.S. Congress passed a bill that subsidized farmers in
the United States by an additional $6 billion. The total
American subsidy for farmers is $22 billion or five times higher
than what the subsidies are in this country.
In the European Union wheat farmers are subsidized by a total of
$205 per tonne. That is the subsidy in Europe. Against these
odds it is no wonder that the price of grain without the subsidy
is very low. Indeed it is below the cost of production. For
that reason a lot of farmers are suffering.
There is a fellow in my riding from Balcarres named Lloyd Pletz.
He has said publicly in the media “I am finished in the spring.
I have no way to hang on”. He told a story in a press
conference on October 16 organized by me and the member for
Palliser. He talked about the farmers in his neighbourhood who
were going bankrupt and were broke. They would have to sell
their farms and get out of farming come next spring if there is
no help on the way. He also talked about farm stress and
difficulties in families.
There was another women named Mrs. Elder who operates a farm
distress line. She said “My phone has never been ringing as
much as it has been ringing this fall with people calling in.
There are marriage breakdowns, financial difficulties, stress in
the family, sicknesses and so on”.
We have a real crisis that is not of our own making as Canadian
people. The question is what do we do about it. There are three
things we have to do. One we are already doing. In the short
run we need an emergency payout to farmers. I am talking
primarily about cereal producers, grain producers and wheat
producers but also about hog producers.
That issue is a bit different. Hog prices have fallen
drastically mainly because of what has happened in Asia and the
loss of that market because of collapse of the Asian currency and
the Asian economy. The market is not there. Hopefully that will
recover. There are signs that it might be recovering a bit in
that part of the world.
We need an emergency payout to farmers to make sure they survive
and can plant a crop next spring. We can afford that as country.
We cannot afford not to do it as a country.
The Minister of Finance a few weeks ago announced that in the
first six months of this year our surplus was running at $10.5
billion. The Minister of Finance should signal very quickly that
several hundred million of that will be paid out by springtime to
farmers in emergency aid. That will not only keep farmers on the
land, which is important, but it will also provide jobs in the
Canadian economy and a spin-off for people in the small towns and
cities across the country.
Emergency aid of several hundreds of millions of dollars is
needed to keep farmers on the land. We are running a surplus of
some $10 billion at this time. Maybe it will be $15 billion, $20
billion or $25 billion by the end of the year. We do not know.
Surely to goodness we can provide $700 million or $800 million to
farmers between now and spring seeding time.
That is my basic plea this evening. We should do that and
announce it before Christmas so farmers will know, their bankers
will know and the credit unions which finance farm loans will
know well ahead of time that a payment is coming. Then farmers
will be able to afford to plant their crops in the spring. That
is extremely important.
Another thing we need is a long term farm policy, a long term
program that is put in place to handle a crisis like this one. I
know this is being discussed in the agriculture committee and in
other forums around the country.
It should be a program based on the cost of production, so that
if the cost of production falls radically and drastically as we
have seen now there will be an automatic kick-in where the farmer
then is supported up to the basic cost of production.
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That is what we need in terms of a long term farm program so
that there is something there. It would be a bit like the
unemployment insurance program used to be for workers, something
that was there in a time of crisis, in a time when the man or the
woman lost his or her job so that there was something there. We
need that too when it comes to agriculture in terms of the long
run.
I also want to mention this evening the whole area of the trade
wars. I know the government has spoken out on this matter. I
know the foreign minister and the minister of agriculture are on
their way to Washington tonight and tomorrow. I think we have to
take a very aggressive role in the international community, in
Washington, at the WTO, in GATT, in Europe and in the Council of
Europe in speaking out against these subsidies that are killing
the farmers of this country. We have to do that and I know our
government is doing that.
Parliament should express itself very clearly from all parties
in the House. The ministers should do that as often as they
possibly can on behalf of our farmers. That is extremely
important.
What is happening today is not the fault of our farmers. It is
the fault of the treasuries of Europe and the treasury of
Washington that are subsidizing their farmers to such a large
degree that our farmers are going down. It is a crisis, unless
one has been on the prairies, that might be difficult to
visualize. It is the worse crisis facing farmers in my province
since the Great Depression of the 1930s. That is without any
exaggeration.
This has a tremendous spin-off in terms of the whole economy,
the small towns and cities across the country. When farmers are
going to lose their jobs or are worse off they do not spend money
and everyone is worse off.
Why do we not unite in the House and send a very clear signal to
the Minister of Finance and to the Treasury Board that part of
the expected surplus this year should be spent before spring on
an emergency payment to farmers?
Some hon. members: Hear, hear.
Hon. Lorne Nystrom: I hear the members of the Liberal
Party saying “Hear, hear”. I am glad to hear that. If we
could somehow come to an agreement in the House through a
unanimous vote of one sort or another we would send a signal to
the minister and to cabinet that would be very worth while.
Perhaps that is what we should talk about after this debate is
over in terms of an all party agreement. It might be useful to
pursue that. I am just thinking of it as I am on my feet.
This is where ideologies are set aside. We have our differences
with different parties in the House, but this is a crisis all
Canadians must get together to help resolve. We did it in the
Saguenay. We did it in the Red River. We did it over the ice
storm. I think we should do it now.
Mr. Peter Stoffer (Sackville—Eastern Shore, NDP): Mr.
Speaker, it is a great privilege to speak in the House this
evening on a crisis, it saddens me to say, of truly biblical
proportions when we think about what is happening to our farmers
in western Canada, central Canada and the maritimes.
My critic role in parliament is on fisheries and oceans.
Probably some people may be asking why I would be discussing the
farm crisis. I can tell people firsthand of the crisis that
happened to the people of Newfoundland, Nova Scotia and the rest
of the Atlantic provinces. That is happening to people in
western Canada. That is happening to people in central Canada.
That is exactly what is happening to farmers.
Farmers are the finest people in all of Canada when it comes to
agricultural work. We are not just talking about people who work
the land. We are talking about people who actually risk their
lives every day because farming is one of the toughest
occupations out there. They deserve our help and they need our
help now.
In my 10 minutes I will read a letter from the minister of
agriculture and food of Saskatchewan. This is a letter he has
written to everyone in the House of Commons. Although he cannot
be here to read it himself, I would like to read it for him
because it states exactly what the problem is:
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Dear House of Commons:
It is with regret that I have to write this letter to inform you
about the serious situation facing Saskatchewan farmers.
I first want to point out that Saskatchewan farmers are among
the most productive in the world. They are prepared to compete
in world markets on a fair basis. However, current world markets
are anything but fair. The United States and the European Union
continue to provide massive subsidies on their production and
exports. This has been a major factor in driving grain prices
down over the last year.
The level of subsidies in the U.S. and EU can be illustrated by
looking at information from the Organization for Economic and
Co-operative Development (OECD). For wheat, the subsidy, as
measured by a producer subsidy equivalent measure, was 10 per
cent in Canada, 32 per cent in the U.S. and 36 per cent in the
EU. This means a Saskatchewan farmer growing wheat has to
compete against farmers getting 3.2 to 3.6 times as much
assistance.
The impact of low prices is being felt in the agriculture sector
and throughout the provincial economy. Farm incomes for 1998 are
projected to drop $407 million from the five-year average. In
1999, they are projected to be $766 million below the five-year
average. Clearly, our agriculture sector cannot be expected to
handle this type of situation on its own.
There are two issues that need to be dealt with. One is the
need for a long-term strategy to deal with multi-year disasters.
Saskatchewan asked at the 1998 summer annual meeting of
federal-provincial ministers for this to be addressed as we
jointly negotiate a new five-year framework agreement to begin in
the year 2000. The second and more pressing issue is the need
for a short-term solution to the cash flow problem Saskatchewan
producers are facing today.
I am seeking support for a disaster program to protect our
farmers against the dramatic income drop. The program must be
federally funded in the same way that the U.S. and EU fund their
farm programs. Only the federal government has the fiscal
ability to fund such a program. Saskatchewan is prepared to help
our agriculture sector as much as possible. We do this by
contributing 40 per cent of the costs to such programs as crop
insurance and the Net Income Stabilization Account (NISA)
program. We already fund agricultural programs at a much higher
level relative to our tax base than any other government in
Canada. In fact, it is over four times higher (on a per capita
basis) than the federal government and the average support
provided by all provinces. Saskatchewan clearly does not have
the additional fiscal capacity to fund this type of disaster
program.
The current farm income situation is a federal responsibility:
the income problem is primarily a result of the use of subsidies
by other countries and international trade is a federal
responsibility; subsidization of our industry's competitors is
primarily being provided by the national governments in both the
EU and U.S.; only the federal government has the treasury that
can deal with this type of problem; and the federal government
chose to completely eliminate export subsidies in Canada prior to
receiving the same commitments from other countries when it
eliminated the Crow benefit. This federal decision has taken
$320 million annually out of the pockets of Saskatchewan
producers.
These large problems are clearly beyond the scope of an
individual province. Saskatchewan cannot go to those farmers who
have lost almost 70 per cent of their net income this year and to
the 40 per cent of Saskatchewan people whose livelihoods are
indirectly supported by agriculture in this province—and ask
them for more tax dollars to fix a problem created by our federal
government.
I agreed with federal government decisions to utilize Canadian
taxpayers' dollars to help out the east coast fisheries through
targeted transition funding; I agreed when they provided disaster
relief to Manitoba during the flood; and I agreed when they
assisted Ontario and Quebec after the ice storm. My hope now is
that they can see their way clear to assist prairie producers
during this period of severe financial hardship, a hardship
caused through no fault of their own.
The federal government must take action to press the EU and U.S.
to eliminate the use of trade distorting subsidies. They must be
willing to protect industry during this income shortfall if the
U.S. and EU subsidies continue. I need your help to ensure
Canada puts as much pressure as possible on the EU and U.S. to
reduce their production and trade distorting subsidies.
I do have confidence in the future of our industry. But it
needs help to address periods of low incomes. I ask for your
support in getting a short-term, disaster relief program in place
before spring seeding in 1999.
This letter was signed by Saskatchewan Minister of Agriculture
and Food Eric Upshall.
What we are talking about are the finest farmers in the entire
world. In fact, I would like to say that this crisis relates
exactly to the fishing industry on the east coast.
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In conclusion, farmers are going through the most devastating
time of their lives in the hog producing industry. What have
these farmers done? Some of them have actually given thousands
of pounds of pork away to their local food banks. We are talking
about not only the best farmers in the world, but the finest
people in the world as well.
Mr. John Maloney (Erie—Lincoln, Lib.): Mr. Speaker, I
will be sharing my time this evening with my colleague from
Etobicoke—Lakeshore. Later in the evening the House will also
be hearing from my colleague from Scarborough East. It is
important to note that these two members come from the largest
urban centres in Canada and they are as concerned and as anxious
about the plight of our farmers as members from rural areas.
The Ontario pork industry is suffering through a severe period
of below cost of production pricing. The outlook for the next 6
to 10 months appears most unfavourable.
Many of our nation's pork producers are under financial stress.
Some are facing bankruptcy and financial ruin. Last week I met
with over 70 representatives of the pork industry from the
Haldimand and Niagara regions. I would like to tell this
parliament and the people of Canada about the crisis they are
facing.
As of last week the price was 62 cents per kilogram. The five
year price average is $1.65 per kilogram. Hogs are sold on a
dressed weight basis of approximately 84 kilograms. The
break-even cost, including feed plus variable and fixed costs, is
about $1.50 per kilogram. At 62 cents per kilogram, feed costs
for hogs are not being met, yet farmers are obliged to look after
the welfare of the hogs plus cover the other variable and fixed
costs. Simple mathematics tells the tale.
In the Niagara and Haldimand regions where my riding of
Erie—Lincoln is located, pork producers produce upward of 38,000
hogs annually, plus weaner pigs and sows. This production
translates into over $4 million directly into the economy of the
region. The added value of further processing, transportation,
assembly, jobs, et cetera, pushes the economic benefit well
beyond the $4 million mark. This is an industry that my riding
can ill afford to lose.
In Ontario pork producers pump $668 million directly into the
economic activity of their local communities. Agriculture
accounts for 13% of the gross domestic product of Ontario. The
Ontario pork industry in total accounts for 43,000 jobs and $4.5
billion in the economic activity of our province. One out of
every seven jobs in the agricultural sector is provided by the
pork industry. As the House can see, the pork sector plays a
very significant role in the economic activity of the province of
Ontario.
The current depressed prices are taking a whopping $64,000 per
week from my region of the economy and an incredible $8 million
out of the Ontario economy each week. This not only affects the
producers, it also affects the feed suppliers, equipment dealers,
utility companies, et cetera.
What brought about the severe price drop? The answer is direct.
Oversupply of hogs in the North American market. A rapid vast
expansion in the United States and within Canada has pushed hog
numbers beyond the capacity to consume, both domestically and in
foreign countries.
Growth in Ontario has been somewhat modest, coming at the
request of processors and government urging producers to tap into
the Asian export markets. These markets have not developed as
rapidly as hoped, largely due to the economic crisis in the
Asia-Pacific region, an unexpected phenomenon that has occurred
through no fault of the pork producers. Fortunately, the quality
of pork produced in Ontario is still in demand, but not at the
export levels hoped for.
Ontario pork producers are competitive. They have the skills,
the genetics, the infrastructure and the land base to continue
producing a high quality product recognized the world over.
However, they cannot compete against subsidies outside of
Ontario, be they in other provinces or the United States.
Pork producers in Ontario have little or no government
assistance. The NISA program to which producers and governments
contribute only have sufficient funds to cover two to three weeks
of losses for the average producer. This is totally inadequate
under the current circumstances.
During my meeting with representatives of the pork industry at
my Smithville constituency office I was asked to make several
requests of the federal government.
At the federal level producers across Canada are represented by
the Canada Pork Council. They have asked that federal members of
parliament talk with members of cabinet, especially non-rural
members, to urge swift acceptance and passage of an all farm
disaster relief program in order to get funds into the
agricultural community by January 1999. This I have done.
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Pork producers are used to and operate within a cyclic market.
The present situation, however, is not a normal cycle in the pork
industry. The crisis has caught everyone by surprise and is well
beyond the disaster stage. It is now a catastrophe.
I believe that this government can and should assist pork
producers in this period of unprecedented need. I also urge
Canadians everywhere to do their part by including more pork in
their diet. It is a truism that every little bit helps.
I have focused on the pork industry; however, this is not the
only industry affected. Let me speak about the overall crisis.
For the many Canadians who may be listening to this important
debate tonight I want to point out that many connections link
rural and urban Canadians and all of us will be affected by the
current problems in the agricultural sector.
Canadian farmers produce affordable and healthful food for our
tables, along with many non-edible products such as ethanol motor
fuel that contribute to a clean, sustainable environment.
Now that this combination of factors, including grain stock
surpluses and financial political instability in Asia, Latin
America and Russia, have decreased demand for our commodities and
pushed prices to their lowest level in 20 years, today some
farmers are experiencing a potentially disastrous cash crisis.
The Canadian agriculture and agri-food industry is the third
largest employer in Canada. In addition to farmers, there are
suppliers, processors, transporters, grocers and restaurant
workers. The agriculture and agri-food industry generates about
$95 billion in domestic retail and food service sales annually.
Grains and oilseeds are among our leading agricultural exports.
In 1996, the value of Canada's agricultural food exports was a
record $19.9 billion, with half of the exports going to the
United States.
The prairies, the bread basket of Canada, have been particularly
hard hit by the low prices. Grain producers, especially those in
Manitoba and Saskatchewan, are affected—and let us not forget
Ontario—as are cattle producers and the hog farmers who I
mentioned earlier.
On a national level, farm income is expected to be down 20% from
1997. Farmers in Manitoba are expected to see their incomes drop
by 40% compared to the five year average. In Saskatchewan
incomes are expected to be almost 70% below the five year
average. With problems expected to continue through 1999, the
situation requires a short term targeted response, but also
demands long term solutions. It is a national problem requiring
a national response.
At the request of the Minister of Agriculture and Agri-Food,
industry leaders and provincial and federal representatives met
in Ottawa on November 4 to look at farm income forecasts and
discuss options to address the income crisis.
The Government of Canada is very concerned about the farm
financial situation and realizes the sense of urgency and
importance. It is indeed very urgent and very important. This
is why farm income is currently one of the priorities being
considered by cabinet today. I thank the minister and his staff
for keeping us apprised of the developments.
I know that the minister has had ongoing discussions with
industry and provincial counterparts about the problems Canadian
producers are facing. I am confident that this work will
continue with all stakeholders to put solutions into place,
hopefully very soon.
I hope the minister understands the importance of giving farmers
some indication before Christmas, if at all possible, not on
whether there will or will not be additional support for farmers,
but what the particulars are of this much needed all farm
disaster relief program.
When such a program is announced, I urge all of my colleagues in
this House to ensure that it receives the support it deserves. I
urge this government to hold out a hand to a deserving group in
need in Canada, our farmers.
Ms. Jean Augustine (Etobicoke—Lakeshore, Lib.): Mr.
Speaker, I am pleased to participate in this debate on farm
income.
This past weekend my constituents in the riding of
Etobicoke—Lakeshore watched with great interest the various news
reports on the serious situation facing farmers across the
country.
Yes, we are an urban riding. Etobicoke—Lakeshore has no
agricultural sector in its economic base. Economic activities in
Etobicoke—Lakeshore are concentrated in the service and
manufacturing sectors. Nonetheless, the issue at hand affects us
all as Canadians.
Etobicoke—Lakeshore relies heavily on the agriculture base of
the Canadian economy to provide it with fresh fruit, produce and
other products. In light of this reality, I offer the support of
the people of Etobicoke—Lakeshore to all of the farmers in
Canada during this crisis.
Farming is one of those activities that is the mainstay for many
communities. Indeed, without farming in various regions of the
country many communities would cease to exist economically.
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Etobicoke—Lakeshore cares about the livelihood of these
communities. The problems they face concern us all. Communities
across Canada are all a part of this economic system and when one
part is affected it could lead to disruption throughout the
entire system.
There is a food terminal in Etobicoke—Lakeshore that
distributes food from all over the country to various local
businesses so they, in turn, can supply all Etobians. I can only
imagine the impact of this crisis on that operation at present.
I am encouraged by the spoken words, the passion and the
conviction of the Minister of Agriculture and Agri-Food. His
conviction as he faces this serious situation in farm income has
buoyed my sentiments and stirred in me the fact that he is
joining together with all partners to bring about a resolution.
I know his commitment. I listened and my constituents listened.
We know he will respond and that his response will be the
assistance that farmers need.
A senior in my constituency asked why they are facing this
problem. I will give a few answers, as I understand them.
Demand for key agricultural products in Asia and Russia has been
drastically reduced as the buying power of consumers has shrunk.
The global financial crisis in farm income here in Canada cannot
be de-linked. Combine this with simultaneous cyclical price
downturns in grain, hogs, cattle and pockets of poor production
in some areas and we get a situation in which many producers are
seeing a pretty significant reduction in income this year.
Some members of this House would argue that the answer to these
problems is insulation from the global economy, but that reflects
a simplistic view of the world rather than compassion for those
affected by this crisis. Offering complaints cannot be equated
with offering solutions, and people need workable solutions.
Talk of removing Canada from global markets, from international
trade or from the need to export makes great rhetoric, but it
will not make one iota of difference to the financial security of
men and women working on Canadian farms, and neither will bland
complaints about not getting everything we want, when we want it,
from trade negotiations.
Let us do our farmers justice by limiting the rhetoric and
instead working together to offer practical responses to a
complicated problem. The responsibility of governing demands
that we offer the pragmatic, not the dramatic.
As this government has done in the past, we will continue to
work with farmers and provincial governments to put programs in
place that are equitable and available to all in need, no matter
what province they live in. We will work with those same
partners to develop a strong, united and compelling position for
international trade negotiations.
In bringing forth long term and short term responses to this
serious situation we are committed to both collaboration and
co-operation. We have our minister's word and I know our
minister's word is meaningful.
Canadian farmers have a right to expect such an approach to this
problem. There is no room for theatrics or one-upmanship given
the nature and the magnitude of the problem. We need all members
from all sides of the House to work together.
In studying this issue I discovered some facts. Our most recent
farm income figures—and let me underline that these were
developed with the provinces—show that at the national level
overall net farm income is down 4% from the average of the last
five years and down 20% from 1997. For a city girl, this is
really terrible news.
Of course, that aggregate number hides the problems we know
exist. Some parts of the country are suffering worse than
others. Depending on the commodity, some producers are
practically unaffected while others are hurting really badly.
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We know that there are very serious problems in the hog and
grains sectors. My colleagues who come from those sectors speak
to me about it. The majority of hog producers are in Quebec,
Ontario and Manitoba, but Prince Edward Island has significant
hog production and has also been affected. The majority of grain
farmers are in Saskatchewan, Manitoba and Alberta. There are
also grain farmers in Ontario.
Meanwhile we must not forget that other producers have
experienced serious drought and even outbreaks of disease, such
as scrapie. This is the full context of the farm income
situation and we must recognize all the forces at work. Doing
this will help us to bring sense to the numbers.
Looking at these problems regionally, we see that in Prince
Edward Island, Saskatchewan and Manitoba the situation is
particularly serious. In fact, realized net farm income is
forecast to be down 40% this year in P.E.I. and Manitoba, while
in Saskatchewan farm income could fall almost 70% relative to the
previous five year average. Unfortunately, current forecasts
also predict that those who are having trouble this year are not
likely to see improvements next year.
I know that there are a great many people in communities coast
to coast who are facing hardship and are looking to the
Government of Canada for relief and assistance. And there are
other pressing issues that demand the attention of the federal
government.
Politics is the art of making decisions. It is not running one
against the other. We must find a way to do the best we can for
all these people. The farm income situation is not one that the
government is going to retreat from, any more than it will
retreat in the face of any challenge. We want to fix this
problem as quickly as possible in order to bring some sense of
calm back to a sector that has become increasingly desperate in
recent days.
Moving forward, not backward, requires partnership between all
levels of government. This is what we must do. There is never a
place for adversarial relationships between federal and
provincial governments. In this situation the Minister of
Agriculture and Agri-Food has made it clear that he wants to work
with all in addressing the situation.
Together with farm organizations and all levels of government,
we need to bring about a solution. Solutions will come from hard
work and from working together and forming those partnerships.
Effective programs will be produced by this approach.
Will it be flashy? No. Will it be a total cure? I think we
must be humble. There are no quick, easy or total solutions.
Workable and meaningful solutions do not have to be flashy or
miraculous in order to make a difference. Making a difference is
part of governing.
The Government of Canada is committed to making a difference in
the farm income situation. All members on all sides of the House
should join together in finding short term and long term
solutions for our farmers.
Mr. John Herron (Fundy—Royal, PC): Mr. Speaker, it is an
honour to have the opportunity to participate in this evening's
debate.
I want to congratulate my colleague the member for South Shore
for moving this motion. I also want to congratulate my hon.
colleague the member for Brandon—Souris, who is our agricultural
critic, for the fine job he has done in terms of raising this
issue and trying to express to Canadians the dire need that
Canadian farmers are in.
What we are talking about in this debate is an issue of a
pan-Canadian nature. This is not an issue where we are having a
fluctuation or a downturn in the market. What we are seeing with
respect to the income crisis which the farmers are enduring right
now is a market collapse. This is a crisis.
In this House quite often we use words that may not actually fit
the situation. However the situation our farmers are enduring
from coast to coast, whether it be on the prairies or in my area
of Atlantic Canada with respect to pork and hog production, is a
crisis.
2135
I will speak this evening about the pork industry. It has been
devastated through the crisis we are enduring with respect to the
commodity pricing. Farmers are in danger of losing their
business. Just recently Charles Keats stated that he may lose
his farm that has been in his family for six generations. He
expects to lose at least $200,000 this year alone. That is the
money he spends to operate his facility.
I worked in an industry where we had to market commodities. I
understand that when $130 is needed to break even and the product
is selling for $82, it does not take very long for it to have a
very negative effect on the business.
This is not a negative effect on their business. This situation
actually challenges their very existence.
Hog farming in the province of New Brunswick is a significant
industry. There are 80 major farmers in the province who produce
over 200,000 hogs per annum which means $25 million for the
provincial domestic economy.
This affects the people in my riding of Fundy—Royal. Nearly
half the farmers who exist in the province of New Brunswick are
within a 30-mile radius of the town of Havelock which is in the
heart of my riding. This does not just affect the individuals
who work in the farming industry. There are individuals in my
riding and a nearby riding and the riding of Moncton who work for
Hub Meat Packers. Seven hundred people earn their living from
that facility.
I was talking a few minutes ago with my colleague, the member
for Pictou—Antigonish—Guysborough. I spoke about a few
statistics which are paramount to this industry in terms of what
is happening and that farmers are not getting the prices they
used to get. Let us put some of this in perspective.
The price that farmers obtain for their hogs today is the same
price that the hog farming industry obtained in 1944. The price
of feed has not gone down. It is not at 1944 prices. Other
commodities which farmers need to operate their business are not
at 1944 prices.
I may have made a mistake in talking about statistics. What is
at hand is that families from coast to coast are losing their
livelihood. They are losing their ability to provide for their
families, to pay for their homes and their car loans. They are
giving up hope of having the opportunity to help their children
who wish to go on to university or pursue some other discipline.
We are looking at a complete meltdown. It is the responsibility
of the federal government in co-operation with its provincial
cousins to ensure that the agriculture industry and Canadian
farming goes on. This is a crisis. The income farmers are
receiving is only 55% of what they received in 1997.
I want to talk about two particular programs which the
Progressive Conservative government implemented between the years
of 1984 and 1993. Those two programs are the net income
stabilization plan, known as NISA, and the gross revenue
insurance plan, known as GRIP.
I would hope that this crisis has demonstrated to my hon.
colleagues on the other side of the House that we really do need
to get a grip. I do not mean to be facetious. The government
chose in terms of its program rationalization to keep NISA, which
would affect the stabilization of pricing, and it did away with
GRIP. GRIP was an assurance program so when there was a
catastrophic change in terms of marketing, the federal government
would be able to provide a bridge for the industry from one step
to another.
The government has chosen to abandon that program.
2140
I will give due credit to the government of the day. There
seems to be a consensus with my hon. colleagues in the Liberal
Party that there is indeed a crisis and I applaud them for
recognizing that. I can say that the farmers have been well aware
of it for all too long.
The Liberal cabinet is on the verge of making some form of
announcement to have an intervention. This announcement has to be
a bankable one. When farmers go to the individuals to whom they
owe money for feed, when they go to their banking institutions,
the banks will understand that they can provide a bridge for the
farmer to ensure the viability of their activity continues to go
on.
Only a few hours ago I had the privilege to speak to a number of
farmers who reside in my riding. I spoke to Mr. Bill Hart from
Norton who told me that it is a very negative situation when he
wakes up each day knowing that he is going to lose $1,000. Mr.
Hart is not an affluent individual who trades in commodities
left, right and centre. One thousand dollars is a very personal
hit on him and his family.
I also had a conversation with Mr. Stephen Moffett who is one of
the largest hog producers in Atlantic Canada. Mr. Moffett
mentioned what we have touched upon which is the fact that the
cuts that have been made to agriculture reflect what we have seen
for that of rural Canada. The first hit the government of the day
takes seems to hit that of rural Canada.
The Progressive Conservative Party is very proud to say that our
new national leader, the Right Hon. Joe Clark, chose to make his
first public impact as leader on this issue. The Canadian public
should be very grateful for the leadership he has exhibited on
this issue.
I am splitting my time with the member for Kings—Hants. In
conclusion therefore, we have talked a lot about the commodity
pricing that is affecting individuals whether they be in the
prairie provinces, on the Atlantic coast or in the province of
Quebec. The statistics get lost but what it means is complete
devastation for an industry.
Mr. Scott Brison (Kings—Hants, PC): Mr. Speaker, I
commend the hon. member for Fundy—Royal for his words this
evening.
I represent the riding of Kings—Hants. In that riding is the
Annapolis Valley, an area known for its agriculture nationally
and internationally. Nova Scotia has had two consecutive years
of the worst droughts in over 50 years. Annapolis Valley has
suffered dramatically based on weather conditions.
This is one issue that has affected our industry in our province
dramatically. Currently there is federal-provincial finger
pointing on this issue. At a time when it requires decisive
action, at a time when we should be helping farmers, there is
finger pointing between the feds and the provinces on the issue.
The province of Nova Scotia is blaming the federal government.
The federal Liberals are blaming the Liberals in Nova Scotia. It
is not a very effective situation.
When we look on a national level, net farm income is down 55%.
In 1998 cash receipts for instance in western Canada are down
terribly. My hon. colleague from Fundy—Royal spoke of the pork
industry. In Nova Scotia the pork industry is a $110 million
industry currently with 1,500 jobs. If we allow our pork industry
to disappear, it will be a significant loss to the province of
Nova Scotia.
That is where we are at. It is not an issue of whether we can
wait or whether the farm community on a national level can wait
for assistance. Farmers need assistance now.
This situation is not a time for dilly-dallying with the federal
government. I commend the government that we are at the point
now where there is a package being discussed at cabinet. We urge
it to move quickly on that package.
2145
It was interesting earlier hearing the Liberals, the patron
saints of hypocrisy, who have backtracked on every major
initiative in the red book from their opposition to the GST,
their opposition to free trade, their opposition to deregulation
and privatization. How dare they ever accuse any other party of
betraying an election platform? They invented the notion. We
see the Reform Party in an ideological box talking tax cuts for
farmers at a time when farmers are facing bankruptcy. It is like
throwing an anchor to a drowning man. Reformers say let us twist
the arms of the Americans or the EU nations to get them to reduce
their subsidies.
I am not disagreeing with the Reform Party that in the long term
these steps have to be taken, but the fact is this has lasted for
decades. The EU nations and the Americans are subsidizing
significantly. It will take work but that will not help the
farmers who are in crisis now.
They say they are opposed to bailouts. They probably would have
opposed Roosevelt on the new deal. The fact is farmers need help
now. While the Liberals dilly-dally and the Reformers
pontificate about Adam Smith, farmers need help.
A nation's ability to produce food is fundamental. Frankly,
current income support programs simply do not cut it. We need to
act decisively. There is no time for this ideological warfare.
Farmers need assistance.
The hon. member for Fundy Royal was speaking about the GRIP
program which was gutted by the Liberals. On a national level if
we look at some of the programs from the past, ultimately if we
do not have sustainable long term programs that ensure there are
funds and programs available for farmers in crisis we will always
be back to this type of situation where we are trying to deal
with a crisis on an ongoing basis.
This is an unprecedented crisis in recent history. We recognize
that. We urge the Liberals to move quickly. This is not an issue
for ideological wrangling. It is a time for us to do what is
right and to help farmers.
In the Annapolis Valley we are seeing farmers go bankrupt at an
unprecedented level. It happens every week that we are getting
calls to our constituency offices and hearing stories of absolute
heartache and devastation from family farms, farms that have been
in these families for generations. There are seven or eight
generation dairy farms that are facing devastation based on the
current situation.
The pork industry is going downhill. The apple industry in the
Annapolis Valley is facing significant challenges. We need a
holistic program. We need to work in terms of foreign policy to
address the subsidies issue globally. We need to address our tax
policies in Canada and ensure that farmers and all business
people are not impeding by an egregiously heavy tax burden. But
in the short term we must do what is right. We must do what is
important, help farmers who face a crisis right now.
Mr. John McKay (Scarborough East, Lib.): Mr. Speaker, I
will be splitting my time with the member for
Dufferin—Peel—Wellington—Grey, also known as the minister of
feathers. Anything we want to know about feathers, that is the
hon. member to speak to.
I am only the second urban member to speak on this. I want to
acknowledge at the outset, as one of the hon. members asked me
opposite, what in heaven's name does an urban member have to say
about a farm issue.
The last farm exited Scarborough East about a generation and a
half ago. It was probably my father's farm. At one point we
were hog farmers and we followed that up subsequently with being
market gardeners. I vividly recall doing rhubarb roots in
November.
2150
It was an awful experience. One did not have to do this for
very long before realizing there was another way to make a
living. The novelty of doing it wears off after a while.
I am actually the first generation not to own land and make a
living from it. Some time during the next month I have to make a
decision as to whether we will sell the family farm.
I can say unequivocally that the people of Scarborough East are
not opposed to paying a fair price for the food they consume from
Canadian farmers. That in some respects is the issue. While I
speak from the vantage point of an urban member and a lapsed
farmer, I want to address the issue of whether this is a crisis
or a disaster as speaker after speaker has said.
I draw attention to the overview of the 1998-99 farm income
forecast of NISA balances of October 30 prepared by the Minister
of Agriculture and Agri-Food. If we look through the numbers for
certain provinces one has to ask where is the crisis. The cash
receipts for 1998 for the province of Ontario will be $6.7
billion, up approximately $400 million from the previous five
year forecast. Income in 1998 will be the highest it has been in
years previous. The average for the years 1993 to 1997 is $415
million. This year it will be $625 million for the province.
The net income will be $674 million, up considerably over the
$540 million average for the previous four years.
Hidden in the numbers are some sectoral problems, particularly
in the area of hog production. If we look at the numbers there
is a scheduled fall-off of about $270 million in one year. It
will be concentrated in one sector. I believe that is where the
crisis is.
As we move further west it is clear that the crisis gets deeper
and deeper. In Manitoba the net income over the previous four
years was $287 million. This year it will be $143 million
falling down to $134 million, something in the order of a 40%
fall-off from previous year averages. Then if we go further west
to Saskatchewan the numbers become quite dramatic. The total net
income for the average of 1993 through 1997 was $715 million.
This year it will be $83 million. Next year it is projected to
be $72 million. This is estimated to be something in the order
of a 70% drop-off from the previous five year average. Clearly
there is a crisis and an issue of great difficulty to individual
farmers.
The numbers do not lie in these instances. There is a serious
meltdown over the three provinces of Saskatchewan, Manitoba and
Prince Edward Island. It is clearly directed to two sectors, the
grain sector and the hog sector.
The question is whether the government should be panicked into a
response. There are a number of serious issues among farmers
particularly in Manitoba and Saskatchewan. The grain and hog
sectors are very hard hit. There will be spill-overs into other
areas and other sectors. There are vigilante people in the
United States who have decided to take the law into their own
hands and block access to markets. However, should the
government panic as suggested by some members opposite?
Apparently the Reform Party's solution of tax cuts is the
panacea to fit all evils. This is one idea that fits all issues.
Tax cuts will not be too terribly useful to a farmer who has no
income. Under the circumstances a tax cut is a meaningless
solution.
2155
The NDP, on the other hand, described this crisis as something
comparable to the dirty thirties. I suggest that is hyperbole
and not something that necessarily needs to be addressed. Its
solution is to get into national programs and to look at
subsidies. But if we look a little more carefully at subsidies,
they do not really cut it. If I am reading correctly, the
producers subsidy equivalents produced by the Minister of
Agriculture and Agri-Food show that in the pork area where we
subsidize the most we have the greatest problem.
Similarly, however, if we look at the wheat area where we
subsidize the least, second only to Australia, that is also an
area of problems, similarly with corn where we subsidize very
little. We subsidize very little in barley and yet we still have
problems in those areas.
It is quite clear from the statistics that even where we
subsidize heavily there is no correlation between prosperity of
farmers and absence of prosperity of farmers. Subsidies is not
an area in which the government should go or be encouraged to go.
The government has taken something of a measured response to
this issue. I suggest it is the right path to pursue. Its first
response was with respect to the NISA program, a simple rainy day
account to which farmers are entitled to contribute in the good
years and followed up with a contribution by the government.
This is the time to draw, and we heard the Minister of
Agriculture and Agri-Food suggest the ability to draw will be
eased in this situation.
The second area is crop insurance, also a voluntary program. It
offers risk protection to agricultural producers who contribute
one-third of the cost of the program. It is estimated that $430
million in direct payments will go to farmers this year.
There are a number of other programs into which the government
enters along with the provincial government and I need not repeat
those.
The minister has been meeting with representatives of financial
institutions in order to mitigate the requirements of financial
institutions and orderly programs with respect to debt
management.
All these are measured and appropriate responses to a serious
issue. So it is my view that the Government of Canada has shown
its concern about the farm financial situation and realizes the
sense of urgency and importance. This is why farm income is one
of the priorities now being considered by cabinet ministers. The
Minister of Agriculture and Agri-Food has kept his colleagues and
government informed of the situation and is moving us toward a
reasoned and measured solution.
No cause for panic. No cause for disaster. No cause for
hyperbole. No cause to describe this as another dirty thirties
revisited, but rather a measured and reasonable response.
Mr. Murray Calder (Dufferin—Peel—Wellington—Grey,
Lib.): Mr. Speaker, I thank the hon. member for Scarborough
East for sharing his time with me and also compliment the member
for South Shore for having this emergency debate tonight.
I have been farming since 1974. From 1974 until 1985 I was a
pig producer. We had about an 80 to a 90 sow farrow to finish
operation and I can remember going through the farm crisis of the
late 1970s and
early 1980s. I can remember the pain, the
loss of pride, the embarrassment and even
the loss of the will to live. It was a very sad experience. It
was an experience I will never forget and it is also an
experience I do not want to see us go through again. But I
believe right now we are on the threshold of exactly that.
2200
That is one of the reasons why this government is working as
best as it possibly can and as quickly as it possibly can to
address this issue.
In the Globe and Mail underneath the national news it
finally caught on and said “farming crisis to worsen” and then
gave Statistics Canada data. I would like to read some of it
because it is very scary.
In 1997 farmers' net farm income was just over $2 billion. That
is down by 53.4% from the $4.3 billion they earned in 1996. The
story is not in on what is going to happen this year. The
Statistics Canada figures go on to state that wheat crops have
fallen by 43.3% in the third quarter of this year. Revenues were
sliced nearly in half to the tune of 45.5%. For barley the drop
was 48.8%. For hog revenues it has fallen by 26.1%. It also
noted that the wheat board's initial spring prices for this year
were $130 a tonne, a drop of 24.4% from the year before.
When we got into the 11th hour of the negotiations in 1993, the
axiom at that point was
that low prices would stop low prices. Why do low prices
exist today if that is the case? Obviously one cannot produce
something for nothing for a very long period of time before one
is broke. I saw enough farmers in the late 1970s and early 1980s
have that happen to them.
I was part of the Farm Credit Corporation and the loans on my
farm were locked in a fixed rate of interest of 12.5%. I saw
interest rates go to 22%. That was when we got into the penny
auctions. We saw sheriffs at the door and farm houses sealed up.
Basically farmers left with the clothes on their backs. It was a
very terrible time.
It is partially because of a combination of things. We have had
financial and political instability within Europe, Latin America
and Russia. This year, for instance, Russia's average harvest,
which is not all that great, came in at 22% below its
average in a normal year.
We are experiencing another trade war. I would like to read some
data from the USDA that I have picked up surfing the net. I can
also give information on what is happening in Europe. In the
United States, underneath the FAIR act of 1998 there was $6
billion in product flexibility contracts, $1.5 billion in
conservation reserve payments, $750 million in loan deficiency
payments, for a total of $8.25 billion being
injected into the farm economy in the United States.
Also, there were additional support payments of $2.8
billion for market loss, $1.5 billion for the 1998 crop
losses, $875 million for multiple year crop losses, $200 million
for livestock feed assistance, $200 million for U.S.
dairy producers, $27 million for other disaster spendings for a
total of $5.975 billion. That is referred to as the $6 billion
farm aid package.
There is also $1 billion in taxes underneath a new law to
producers. The total in the United States is $15.225 billion for
1998. That is one of the reasons production is up and prices are
down. It is because of subsidies. These are subsidies the
United States said it would do away with. Obviously it has not.
Let us take a look at Europe. Export subsidies as of November
19, 1998, are $47 Canadian for wheat.
2205
There is a subsidy of $105 a tonne for barley and a subsidy of
$138 a tonne for malt.
An hon. member: What about alfalfa?
Mr. Murray Calder: I do not have an answer for that. The
EU subsidizes wheat on average by $116 a tonne or $3.15 a bushel.
The United States is subsidizing at a rate of $72 a tonne or
$1.95 a bushel while Canada is subsidizing at a rate of $15 a
tonne or 40 cents a bushel and Australia is subsidizing at rate
of $13 a tonne or 35 cents a bushel. There is the problem.
The United States says it is the free trader of the world and
wants to do away with subsidies. As far as I am concerned that
is bovine fertilizer. We need what we are working toward right
now, a national disaster program that would kick in and give
support to farmers when the current safety net systems are not
sufficient.
As a farmer I have taken a lot of phone calls from farmers in my
area. I have been talking to guys who lived through the crisis
with me in the late 1970s and early 1980s. It is not just the
opposition that gets these phone calls. Members on this side get
the phone calls too and we are acutely aware of what is going on
out there.
I have spoken repeatedly on this issue over the past six weeks in
national caucus. I have talked not only with the Prime Minister
but with all cabinet ministers present at national caucus each
Wednesday. They are all acutely aware of what is happening. We
have to make sure as a government that in saving our farmers
whatever we do and however we do it, and we will be doing that,
it must be GATT green so that it does not trigger a countervail.
When I produced pigs back in the late 1970s to the mid-1980s
countervails were absolute death to our industry because they
would tie up production. I have been watching production in our
country. We have looked at international trade and we have moved
production in pork from $16 million a year to $19 million a year.
That means we had better be exporting three million pigs or the
floor will be blown out of the market. That is what is
happening.
Mr. Charlie Penson (Peace River, Ref.): Mr. Speaker, I
will be splitting the remaining 20 minutes with the members for
Lakeland and Kootenay—Columbia. I am happy to take part in the
debate this evening because it is of great importance to my
riding of Peace River, Alberta which is mainly an agriculture
producing riding. Farmers in Peace River country know full well
the impact of the agriculture trade wars that have taken place in
the past.
In order to talk about this issue we have to talk about the
massive trade war that was taking place as a background to the
Uruguay round negotiations in agriculture. Agriculture has been
one of those mavericks that have not been under trade rules in
the past. For over 50 years we have had trade rules with regard
to industrial products and some services around the world.
But agriculture was not brought under those trade rules until
1992 and only then it was a modest start. The backdrop was the
massive trade war that was taking place during the 1980s. I know
from my own experience, having farmed during that period, I
certainly do not want to go back there again and be subject to
those massive European and American subsidies. I do not want to,
nor does my son, to go back to the situation where we have farm
programs where we have to jump through all the hoops in order to
qualify, in other words farming the program, growing wheat year
after year with crop rotation which really it did not call for it
at all. It was not a good agricultural practice.
2210
We do not want to go back there. That is the setting for the
Uruguay round that took place with the signing in 1992.
I have to remind the House that it was only a modest start. All
farm countries recognize it was a modest start, that we had to at
least get agriculture started. They used 1986 as the base year
for calculating subsidies, one of the highest years in the
history of agriculture subsidies in the world.
The idea was to get agriculture started, reduce some tariffs,
reduce export subsidies by a modest amount, build in a future
round which is the one we are talking about for 1999-2000 in
order to make great progress. I guess I would have to say it is
understandable that we are in the situation we are today.
Over 85% of the world trade in agriculture is still not subject
to controls through rules. In addition, this has brought about a
very stagnant farm net income situation. For the last 10 or 12
years we have had stagnant farm net income in Canada. The east
Asian situation has hurt us further.
Here is the present situation. Farmers are hurting, net farm
income has decreased and there is the continued big use of
European and American subsidies, although they are staying within
their limits on their program. That brings me to what we need to
do to correct the situation.
We are talking about some kind of short term program, but that
is not the answer for farmers in the long term. I would make the
case that we have to work together with like minded countries to
advance this farm negotiation that is going to be taking place at
the World Trade Organization.
The Cairns Group has been very active in looking for trade
liberalization. I would make the case that we have to also
include the United States as an ally in reducing massive European
subsidies. The reason I say that is I believe they are only
basically responding in the United States to European subsidies,
not really wanting to do it themselves, but Europe has the
systemic problem of trade and agriculture subsidies. I believe
it has the problem for a number of reasons such as a couple of
world wars where it was short of food.
That does not excuse the European Union for producing beyond
what it requires itself. That is what is happening these days. It
is overproducing. Last year world wheat demand was down by 8%
but what did we see from the European Union? A 30% increase in
production. That is because farmers are getting these massive
subsidies.
I suggest we have to co-operate with the United States. It is
one of the world's biggest grain producers. I think it is in our
interest to work together to try to convince the European Union
to phase down these subsidies in the next round of the World
Trade Organization talks to be taking place within the next year.
I suggest we might have to move outside the agriculture box in
order to do that. We have to put some pressure on these people.
We might have to talk about industrial tariffs. We might have to
talk about security in things like NATO, intellectual property,
services, all things the European Union would probably want. I
think we have to be very forceful because our farmers simply
cannot compete against the treasuries of the other countries. We
can compete on the basis of production with anyone in the world
but we cannot compete with the treasuries of the United States
and Europe. It is in our interest to try to get some trade
liberalization.
Mr. Leon E. Benoit (Lakeland, Ref.): Mr. Speaker, I will
focus on a fairly narrow area.
The member for Peace River did an excellent job encapsulating
the trade situation and what did not happen and what should have
happened in that area, although when it came to the North
American Free Trade Agreement and its predecessor, the
Canada-U.S. Free Trade Agreement, Canadian negotiators in those
agreements did an excellent job of negotiating.
2215
We are very thankful for what they did. When it came to the
GATT negotiations that ended in 1992 and were signed by the
government in 1993, Canada took a very weak position. They did
not negotiate in agriculture anything like they should have. As
a result we ended up with a very weak result that is harming
Canadian farmers right now.
Reformers came to the House in 1993. The campaign started in
1992, the year before the election. We came with a comprehensive
agriculture policy which, if it were examined today, would
demonstrate that it would deal very well with the problem that
farmers are in. During that campaign and in the House Reform MP
after Reform MP spoke out on what we saw as a policy that would
have prevented the situation we see today.
I am not only talking about tough trade negotiations. I am
talking about a specific program that we called the trade
distortion adjustment program. This program would have taken
part of the value of the Crow subsidy. We called for the subsidy
to be eliminated. The Liberals eliminated it but they did not do
a key thing we proposed they should do. They did not put a part
of the capitalized value of the Crow subsidy into the trade
distortion adjustment program, which would have provided money
for the situation our farmers are in today. It would have
provided money to directly compensate for damage to commodity
prices which could be attributed to unfair trade practices and
unfair subsidies in other countries.
The major cause of the crisis in grain farming, the single major
cause, is unfair trade practices in Europe and to some extent in
the United States, combined with import restrictions into Japan,
Korea and other Asian countries. Those things more than anything
else have led to the crisis we see today.
In my first speech in the House I proposed that the Liberal
government adopt the trade distortion adjustment program. Dozens
of times Reform MPs throughout the following years raised the
issue until the Crow benefit was eliminated. However the money
did not go into this program. There was a $1.2 billion political
payout to farmers which did them very little good. I would argue
that it split the farm community between renters and farmers
actually farming the land.
The Liberal government is facing a situation right now that must
be dealt with. It ignored what I believe was very good advice
over those years, presented again and again and again. A strong
sensible position was presented, a position which would have
clearly helped deal with the current situation.
Under the plan that we proposed the capitalized value of the
Crow benefit would have been somewhere between $7 billion and $9
billion in total. We recognized the deficit situation. Reform
more than anybody recognized that the deficit had to be removed
and pushed for it. We recognized that taxes were too high.
Reform more than anybody called for tax reduction. Recognizing
all of that, we called for only part of the capitalized value of
the Crow benefit to go into this fund. Possibly $3 billion or
$3.5 billion.
With the interest that would have accrued on that we would have
a good sum of money in place right now which would have been
available for farmers to compensate them not just in an ad hoc
way. That is not what farmers want. Farmers do not want
handouts. They want fair trade. When other countries are not
trading in a fair way, farmers want some help to deal with that.
That is precisely what the trade distortion adjustment program
would have done.
The Liberals did not take our advice.
It was not just advice coming from Reform MPs. It was coming
from the farming community. They did not take our advice and as
a result we are in a situation today where we are talking about
another ad hoc payout and nothing to deal with the long term
problem.
2220
This type of a situation cannot recur every 10 years or so. That
has happened for too long. Farmers should not have to face that
time and again. I know in my life before politics I worked as a
farm economist and I did business consulting with farmers. I sat
across the table from 100 to 200 farmers, farm families at their
kitchen tables, families facing a crisis just like this one
today. Most of them lost their farms. There is nothing I want
less in my life than to have to sit at the kitchen table with
families that are losing their farms again.
What is to be done? The Liberals have to come up with the
answer. Knowing they did not act in a responsible way over the
last five years, it is up to them to come up with an answer or a
solution. It cannot just be a short term payout. It has to be a
long term solution to the problem. That is what they have to do.
I will be watching. Farmers in my constituency will be watching
to see what they do.
Mr. Jim Abbott (Kootenay—Columbia, Ref.): Mr. Speaker, I
am proud to represent the farmers and ranchers of
Kootenay—Columbia who are faced with the specific problem
sourced and created by the Liberal government that relates to all
farmers and many Canadians across Canada.
Ranching and farming are not nine to five jobs. They involve
long, hard hours and hard work often seven days a week. Many
farms and farmers have people off farm working in town at other
jobs and using that money to subsidize the farms.
I am referring to the way in which Revenue Canada, under the
control, jurisdiction and direction of the Liberal government, is
“helping farmers” off the farm. It is bloodthirsty. It is
making changes to the law retroactively. It shows absolutely no
compassion or conscience while it is holding up the bank by
robbing farmers of money they need to pay off bank loans and try
to keep their heads above bankruptcy year after year.
Let me give the specifics of a case. I believe they would apply
to all ranchers and farmers across Canada. In my constituency
ranchers and farmers are cutting timber to enhance grazing or
farmland. They consulted national and local accounting firms on
how the money would be treated by Revenue Canada. They based
their decision to proceed with the timber cut based on
information confirmed by Revenue Canada.
In 1996 and prior years accountants confirmed with Revenue
Canada the money was to be reported under capital gains and taxed
accordingly. These are operations which do not normally depend
on the cutting of timber for their livelihood but may exercise
the option once or twice during the ownership of the property. It
should be noted that from the cases received in my office not one
individual purchased the property with the intent to remove the
timber as a continuing trade or source of income.
In the 1996-97 year Revenue Canada made a decision to review a
number of tax returns reporting money derived from timber sales
and issued approximately 50 questionnaires to ranchers and
farmers who had reported money from timber sales. An additional
50 questionnaires in early 1998 came out and more are
anticipated. These tax returns were determined from cross-checks
of names from the timber mark office in Victoria and Revenue
Canada files. The timber mark list was obtained through a
general memorandum of understanding between Revenue Canada and
the province of B.C.
The 1993, 1994, 1995 and 1996 tax years were reviewed and
reassessed according to the new interpretation by Revenue Canada.
In June 1998 the Tax Court of Canada heard a case called the
Larsen case and a decision was made in July in favour of taxpayer
Larsen.
2225
A decision has been made by the Minister of National Revenue to
appeal the decision, which would require the case to be heard by
the Federal Court of Appeal. A recent letter received in my
office on another issue signed by the minister stated that where
a taxpayer disagrees with the department's decision an appeal may
be filed through the Tax Court of Canada.
The tax court is an independent tribunal and provides the
appropriate means to settle an honest difference of opinion
between Revenue Canada and the taxpayer. It is to be noted that
the tax court found in favour of my taxpayer.
Similar cases were heard by the tax court in the early 1950s and
1970s and rulings were also in favour of the taxpayer. Even with
that history, Revenue Canada insisted on presenting its case
again and spending more taxpayers dollars fighting the hand that
feeds it, the hand of the taxpayer.
Revenue Canada says there has not been a change in the
legislation in question. The reason for the audits being done in
1996 and 1997 and to continue in 1998 is that in the past the
amounts received from the sale of timber taken off the properties
was insignificant according to Revenue Canada definition and
therefore was never questioned as to whether it was treated as a
capital gain against the cost base of the property.
In the 1990s the dollar value in the sale of timber has
increased. Therefore Revenue Canada no longer considers the
amounts to be insignificant. Consequently it is questionable if
the amounts can be treated as a capital gain against the cost
base of the property.
Initially our office was advised by Revenue Canada staff that
the reassessments were nationwide and B.C. was the last area to
be reviewed. It should be noted that this problem is not just a
problem in British Columbia in my constituency. It is also a
problem in the maritimes.
The point of my presentation is that the Liberals talk all the
time about how they are helping people, how they are serving
people. It was pointed out during the tenure of John Turner,
when he was temporary prime minister of Canada, that serving the
public is also a term that can be used for bulls.
A case scenario is one where there is a partnership of three
individuals who were all reassessed. The initial appeal of
capital gain treatment was rejected. The accountant was advised
by Revenue Canada that the money should have been treated as
revenue versus losses. These people are in a position where it
will cost them more money to fight Revenue Canada than it would
for them to comply with this reassessment by Revenue Canada.
A second case is of a retiree who is in a position where he is
just not able to service the extra load dumped on him by Revenue
Canada. We are talking about a potential bailout by the Liberals
of a specific problem. I am talking about the problem for all
ranchers and farmers across Canada, that Revenue Canada
fundamentally is out of control when it does retroactive tax
grabs. This is what I am speaking about.
The Liberals have to get it right. They have to treat ranchers,
farmers, all taxpayers fairly.
Mr. Mark Muise: Mr. Speaker, I rise on a point of order.
Will the hon. member take questions?
The Acting Speaker (Mr. McClelland): There are no
questions or other motions during this period of debate according
to the standing order under which it was promulgated. There are
two minutes left in debate.
Mr. Peter Adams (Peterborough, Lib.): Mr. Speaker,
plummeting prices for grains and hogs are causing great hardships
for many farmers and their families. If government assistance is
not available soon, a very bad situation will become worse.
I have received appeals and suggestions from Peterborough County
Federation of Agriculture and I have spoken to hog farmers in my
riding. They all emphasize that an extremely serious and
worsening situation exists. They all stress that action is
needed now before a catastrophe occurs. Hogs are being sold out
of Peterborough county at a dead loss of tens of thousands of
dollars. This is a matter which is out of the control of
farmers.
Retail prices have not changed. It would be interesting to know
what the processors, wholesalers and retailers are doing with the
excess profits at this time when farmers are hurting. I urge the
minister of agriculture to produce an income relief plan soon. I
urge that this plan target producing farmers with a very great
emphasis on small operators. I also urge that the plan be
designed to lay the groundwork for much greater farm income
security in the future.
2230
Various groups, including the Canadian Federation of
Agriculture, have made excellent suggestions in this regard for
approaches which would not be subject to countervail.
This is a provincial and federal matter. I urge all the
provinces to support any initiative which our minister proposes.
It is important that the minister act as soon as possible. Even
the news of an effective plan would give the banks confidence to
hang in with our farmers.
I have spoken to the minister about this on a number of
occasions. I know his heart is with all the farmers affected by
this crisis and their families. I know he is working hard to
produce an effective, far reaching plan of action. I urge him to
act as soon as humanly possible.
Our thoughts and prayers are with all farmers and their families
across Canada who are experiencing hardship at this time.
An hon. member: On a point of order, Mr. Speaker.
The Acting Speaker (Mr. McClelland): I am sorry, we are
not entertaining any points of order in this debate either.
It being after 10.30 p.m., pursuant to order made earlier this
day, I declare the motion carried.
Accordingly this House stands adjourned until tomorrow at 10
a.m. pursuant to Standing Order 24(1).
(The House adjourned at 10.30 p.m.)